The probe by German prosecutors was originally looking into engine-maker Tognum and alleged kickbacks and bribes in connection with a weapons deal.
But it now appears that ThyssenKrupp's submarine-making subsidiary HDW transferred money to a South Korean businessman who is a focus of the original probe. The company allegedly then received a submarine contract worth €2.5 billion from South Korean authorities, according to a report in weekly news magazine Der Spiegel.
ThyssenKrupp said it was launching an internal review and also working with authorities. Auditors and attorneys will go to South Korea for an on-site investigation in November, the company said.
The investigation into Tognum has raised eyebrows because of the gravity of some of the allegations.
According to a 200-page report, a company board member with responsibility for Asia may have been involved in facilitating millions of euros in kickbacks and bribes in connection with the arms deal.
The report described raucous parties with South Korean defence officials at red-light district nightclubs.
HDW, which has been owned for several years by ThyssenKrupp, operates Germany's largest shipyard in Kiel. It employs thousands of workers throughout Europe.