Stock in Samsung Electronics fell as much as 1.6 per cent at the open on Friday after the early-morning arrest of Lee Jae-yong, heir apparent of Samsung Group.
The arrest of Mr Lee for bribery, embezzlement and perjury was made in connection with an investigation by a special prosecutor into the massive corruption scandal that has engulfed President Park Geun-hye.
Shares had jumped in January after a court initially declined a warrant for Mr Lee’s arrest.
South Korea’s independent counsel, which is investigating President Park’s influence-peddling scandal, has accused Mr Lee, vice-chairman of Samsung Electronics, of making millions of dollars of political donations in return for business favours.
Samsung Electronics reported its best quarterly profit in more than three years last month, with strong sales of memory products and display panels helping to offset the costly recall of its Galaxy Note 7 smartphone.