Prosecutors have said they are investigating whether Choi Soon-sil used her friendship with President Park Geun-Hye to gain access to classified documents that enabled her to influence government matters and benefit personally through non-profit foundations.
The swirling scandal has sparked public anger and sent Park's approval rating to a record low, with thousands of protestors gathering in Seoul on Saturday night calling for her to step down. Park accepted the resignations of eight of her top aides over the weekend.
Choi, 60, arrived at the prosecutor's office on Tuesday morning in handcuffs and a surgical mask and a dark coat, escorted by correctional officers. A prosecution official and her lawyer said she had been detained late on Monday.
Although Choi was being questioned at another location, a man used a heavy construction excavator to smash the front entrance of the Supreme Prosecutors' Office building in Seoul, injuring a security guard, in an apparent act of protest against Choi. He was arrested by the police.
According to Han Jeung-sub, a senior official at the Seocho Police Station, the 45-year-old man told police: "Choi Soon-sil said she had committed a crime she deserves to die for, so I came here to help her die."
Park, 64, and Choi have known each other for decades, and Park said in a televised apology last week that her friend had helped her through difficult times.
Park's father Park Chung-hee led South Korea for 18 years after seizing power in a military coup in 1961. Park Geun-Hye served as acting first lady after her mother was killed by an assassin trying to shoot her father, who was himself murdered by his disgruntled spy chief in 1979.
Park is in the fourth year of a five-year term and the crisis threatens to complicate policymaking during the lame-duck period that typically sets in towards the end of South Korea's single-term presidency.
The scandal has weighed on the South Korean currency and stocks, as investors fret about political uncertainty, with the won falling 0.9 percent last week while stocks slipped 0.7 percent.
Worried that Choi may be a flight risk and could destroy evidence, prosecutors placed her under emergency detention without a warrant, South Korea's Yonhap News Agency reported.
Under South Korean law, a suspect can be held under emergency arrest without a warrant for up to 48 hours. A longer detention requires an arrest warrant issued by a court.
Choi begged for forgiveness when she arrived to meet prosecutors on Monday.
In an interview with South Korea's Segye Ilbo newspaper published on Thursday, Choi said she received drafts of Park's speeches after Park's election victory but denied she had access to other official material, or that she influenced state affairs or benefited financially.
Park said last week she had given Choi access to speech drafts early in her term and apologised for causing concern among the public.