Kim Han-sik is facing allegations that he was aware that the ferry exceeded its cargo limit but did nothing to stop it from leaving port.
He's the company's fifth person under arrest after investigators raised suspicion that improper stowage and overloading of cargo might have contributed to the April 16 disaster.
A court in the southern port city of Mokpo says it issued an arrest warrant for Kim because there are worries he may destroy evidence.
More than three weeks after the sinking, 273 bodies have been retrieved - most of them high school students - with 31 others still missing.
A civilian diver fell unconscious while searching the wreckage and died on Tuesday.