North Korea's state security minister was sacked last month, presumably over corruption, abuse of power and torture committed by his agency, Seoul has said.
South Korea's Unification Ministry spokesman Jeong Joon Hee said the sacking of Kim Won Hong, who had been seen as close to leader Kim Jong Un, might cause instability in the country's leadership by frightening the ruling elite.
He said there is a possibility that the minister will face stronger punishment as the investigation into his actions continues.
North Korea has not said anything about Kim Wong Hong, and Mr Jeong did not say how the South's government obtained the information.
South Korea has a patchy record of tracking developments in North Korea as information about the secretive, authoritarian state is often impossible to confirm.
Since taking power in late 2011, Kim Jong Un has executed or purged a series of high-level government officials in what the South Korean government has described as a "reign of terror".
It is not clear if Kim Won Hong's alleged sacking means he has been permanently removed from North Korea's leadership circle.
Choe Ryong Hae, a close aide to Kim Jong Un, was believed to have been briefly banished to a rural collective farm for re-education in 2015, but he regained his political standing at a rare congress of the North's ruling Workers' Party last year.