Authorities believe Yoo Byung-eun owns the MV Sewol and that his alleged corruption may have contributed to the sinking.
Police and prosecutors have been after Mr Yoo for weeks and are offering a £300,000 ($500,000) reward for information leading to his arrest.
They have deployed huge resources to investigating the disaster following widespread public outrage.
Mr Yoo, 73, is a member of the Evangelical Baptist Church, which critics claim is a Christian cult.
About 5,000 police officers, some wearing helmets and armed with plastic shields, raided the church’s compound in Anseong, just south of Seoul.
Four church members were detained for allegedly harbouring Mr Yoo or helping him escape arrest, police said.
Another church member was detained for allegedly trying to obstruct the raid.
It was not clear whether Mr Yoo was at the compound at the time of the raid.
Police said they expected to arrest more church members for allegedly aiding Mr Yoo.
The compound, the size of about 30 football fields, is considered the church’s headquarters and thousands of its members gather there for services on weekends.
The area contains ranches, fields, a fish farm and an auditorium that can house up to 5,000 people.
Around 200 church members rallied against the raid, singing hymns, pumping their fists into the air and chanting slogans.
A large banner hanging nearby said: “We’ll protect Yoo Byung-eun even if 100,000 church members are all arrested.”
Mr Yoo, head of the now-defunct predecessor of the ferry’s current operator, Chonghaejin, allegedly still controls the company through a web of holding companies in which his children and close associates are large shareholders.
The Seoul government has offered a £60,000 bounty for Mr Yoo’s eldest son, and one of his daughters was arrested in Paris late last month by French police acting on an international warrant.
The predecessor company went bankrupt in the late 1990s but Mr Yoo’s family continued to operate ferry businesses under the names of other companies, including one that eventually became Chonghaejin.
In 1987, 32 alleged members of Mr Yoo’s church were found dead in the attic of a factory near Seoul in what authorities said was a collective murder-suicide pact. The church denied involvement.
Mr Yoo was investigated over the deaths after a probe discovered the dead cult members had channelled money to him.
He was cleared of suspicions that he was behind the suicides because of a lack of evidence, but was convicted on a separate fraud charge. Church members have since focused on legitimate corporate activities, according to Tark Ji-il, a professor of religion at Busan Presbyterian University. He said the church’s membership is believed to be about 10,000.
The sinking caused an outpouring of national grief, and soul-searching about public safety. Nearly two months after the tragedy, 292 bodies have been recovered – mostly students from the school near Seoul – and 12 people are still missing.