Takafumi Horie has stepped down as president of Japanese internet firm Livedoor, after being arrested amid claims of misleading shareholders.
Mr Horie and three other executives were arrested on Monday
Livedoor executive Kozo Hiramatsu replaces Mr Horie, who was arrested on Monday with three other executives.
Earlier on Tuesday, the Tokyo Stock Exchange said it would begin monitoring Livedoor, alerting investors that the company may be delisted.
Despite the special watch, trading will continue in Livedoor shares.
The allegations that Livedoor executives had spread false financial information about their company were central to last week's share sell-off that forced the Tokyo stock market to close early for the first time in its history.
Livedoor's shares continued to slide and dropped by 31% to 176 yen on Tuesday.
Stock exchange managing director Eisuke Nagatomo said on Monday: "The exchange has placed Livedoor and Livedoor Marketing shares under monitoring, to make known to those involved that the companies are in danger of meeting delisting criteria."
Prosecutors have alleged Livedoor spread false information about its stock.
Mr Horie, a celebrity in Japan who is known for his critical views of the country's business establishment, has denied any wrongdoing.
Livedoor's problems have shaken Japan's business world and stock market and there are fears more problems may emerge.
"Talk in the market about Livedoor going bankrupt or being broken up and sold is strong," the Daiwa Institute of Research said in a report.
One of Japan's best known internet companies, Livedoor had grown through a series of acquisitions and stock splits.