South Korean prosecutors said on Friday they were seeking a warrant for the arrest of Yoo Byung-un, the head of the family that owns the operator of a ferry that capsized last month.
Prosecutors accused Yoo of embezzling funds from ferry operator Chonghaejin Marine, which they see as one of the factors that hampered its safety management, and led to the sinking that killed hundreds of school children.
The Sewol, overloaded and travelling too fast on a turn, capsized and sank on a routine journey from Incheon on the mainland to the southern holiday island of Jeju.
Of the 476 passengers and crew on board, 339 were children and teachers on a high school outing. Only 172 people have been rescued and the remainder are all presumed to have drowned.
Amid nationwide anger over the incident, South Korea's president met relatives of the victims on Friday, repeatedly apologizing for the government's handling of the incident.
The Park Geun-hye administration has faced continued criticism for its handling of the disaster, when a faster initial response could have saved many more lives.
Family members of hundreds of children sat in the road in a sombre vigil steps from the presidential palace earlier this month, demanding the punishment of those responsible, but Park did not emerge at the time.
South Korean prosecutors are hunting for Yoo and his children, visiting the home of his elder son and a religious compound where Yoo is believed to have holed up.
They have already sought the arrest of Yoo's second son and a daughter who stay overseas but no one has been found yet.
Yoo's two sons, Yoo Hyuck-ki and Yoo Dae-kyun, are majority owners of Chonghaejin Marine through an investment vehicle.
Hundreds of members of the Evangelical Baptist Church, of which Yoo is a founding member, built a blockade in front of the compound, describing the probe by prosecutors as religious persecution.
On Thursday, prosecutors indicted the vessel's captain and three senior crew members for homicide. Prosecutors have also indicted the 11 other surviving crew members of the ferry Sewol on negligence charges.
Lawyer Son Byoung-gi, who has spoken for the family previously, said he had resigned, as the family was out of touch. Son's replacement as legal representative also stepped down, according to his law firm.