North Korea has cut by half the number of South Korean tourists it will allow into the reclusive country's Mount Kumgang resort area.
Pyongyang told Hyundai Asan, a South Korean tour company to implement the changes by Thursday.
The company manages the popular inter-Korean tourism project, which ferries more than 1,000 people to the Mount Kumgang resort in the North every day.
For most South Koreans the tours are their only chance to visit North Korea.
More than a million people have taken the tour since the project's start in 1998.
North Korea's move was reportedly triggered by the resignation of Hyundai Asan's chief executive officer earlier this month.
Kim Yoon-kyu, who was popular with officials in North Korea, stepped down following widespread allegations he embezzled company funds.
Jo Woo-kyung, a spokesman for the company, says North Korea's response is likely a misunderstanding.
He says North Korea thinks Hyundai Asan unilaterally fired Mr. Kim. It is not true, he says, Mr. Kim resigned himself, without company pressure.
Mr. Kim previously was linked to a $500 million payoff to the North Korean government in 2000. The deal was orchestrated by South Korea's powerful Hyundai group, the parent company of Hyundai Asan. It was reportedly in exchange for Pyongyang's participation in a groundbreaking political summit with South Korea.
Government officials in Seoul say Pyongyang's move is regrettable but would not comment on its motives.
Hyundai Asan will move ahead with a series of other tours of North Korea.
A group of tourists visited the North Korean city of Kaesong Saturday. The company says additional trips are being planned for September and will not be affected by the North Korean decree regarding Mount Kumgang.