The South Korean government has never paid money to Taliban militants for the safety of its hostages, South Korean presidential spokesman Cheon Ho-seon said on Friday.
Taliban militants kidnapped 23 South Koreans in Ghazni, Afghanistan on July 19. They have, so far, killed two of the hostages.
Cheon made the remarks in response to a report by the weekly magazine Newsweek, which cited an alleged senior Taliban commander as saying that a Taliban group received money from South Korea after the kidnapping.
It also reported that a South Korean envoy, an Afghan legislator from Ghazni and some government negotiators might have been talking to the Taliban group.
"The Newsweek report is baseless," Cheon said.
"The South Korean government is not in a position to give a direct answer to the Taliban's demand that its prisoners be swapped for South Korean hostages. Through the contacts, we intend to stress that our capabilities to meet Taliban demands are limited," he added.