Busan city has accused the Busan International Film Festival head Lee Yong-kwan of paying illicit sponsorship fees.

The Board of Audit and Inspection of Korea conducted an audit on the festival earlier this year. In its report published on Oct. 21, the board said that the festival had offered sponsorship fees to enterprises whose involvement in mediating the sponsorships were not proven in the form of proper documentary evidence.

In the same report, the board also requested the city of Busan, which is in charge of supervising the festival’s budget execution, to prosecute Lee and the festival’s former and current general managers.

The BIFF has immediately released a statement.

“The city government’s recent accusation is surely revenge against the festival for screening documentary “The Truth Shall Not Sink with Sewol” (a.k.a. “Diving Bell”) [in 2014],” said the festival.

“Since the board’s call, the city of Busan has constantly put pressure on the BIFF, implying that accusations may be dropped if Lee resigns. As Lee has refused the call, due to the vindictive nature of the inspection and report, the city went ahead and filed charges on Dec. 11.”

The festival said that paying fees to bodies who broker sponsorships is conventional business practice and that it has received sponsorship for many years under the Busan city’s supervision and guidance.

“Normally, the national board would offer corrective recommendations to organizations or institutions with such administrative mistakes, or discipline the persons concerned. That the board had exceptionally requested that the city charge BIFF, and that the city is pushing ahead with [prosecution] clearly show that the ulterior motive is to oust the festival director,” said the festival.

Lee has been festival director since 2011. His term is scheduled to end in Feb 2016. He was one of the co-founders of the festival in 1996 and has been programmer, deputy director, co-director and festival director.

BIFF is currently co-directed by Lee and actress Kang Soo-youn, who joined the festival in July this year as part of the reform package forced on the festival by the city government after it failed to expel Lee.