Prince Al-Waleed bin Talal, 11 other princes were arrested by Saudi authorities in a sweeping crackdown.
Shares in Kingdom Holding, 95 percent of which is owned by billionaire Prince Al-Waleed bin Talal, dived 9.9 percent as the Saudi stock exchange opened Sunday after reports of his arrest.
The Saudi Tadawul All-Shares Index (TASI) also dropped 1.6 percent only a minute after the start of trading on the Arab world's largest stock market following a sweeping crackdown on corruption that saw the arrest of leading royals and businessmen.
The Kingdom Holding share price did not slide further because, under the rules of the Saudi exchange, stocks are only allowed to fall a maximum of 10 percent in a single trading session.
Since the start of 2017, Kingdom Holding has lost around 15 percent of its market value.
The latest fall came despite the company announcing earlier on Sunday that its profit for the third quarter and the first nine months of the year increased.
Kingdom Holding is one of Saudi Arabia's most important investors with shares in the Euro Disney theme park, US tech giant Apple and Rupert Murdoch's News Corporation, among others.
It also has key stakes in banks at home and abroad, as well as a number of investment, media and agricultural companies.
Saudi Arabia reportedly arrested 11 princes, including Prince Al-Waleed, and dozens of current and former ministers, reports said late Saturday, in a sweeping crackdown as the kingdom's young crown prince consolidates power.
Head of the Saudi National Guard, once a leading contender to the throne, as well as the navy chief and the economy minister were replaced in a series of high-profile sackings that sent shock waves in the oil-rich Gulf country.
The crackdown was reported immediately after a new anti-corruption commission, headed by powerful Crown Prince Mohammed bin Salman, was established by royal decree late Saturday.(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)