Wirecard, a Germany-based payments company has filed for insolvency after the scandal rocked the company. The company’s CEO MarkusBraun resigned and he was arrested by German police earlier this week on the suspicion of fabricating the company’s balance sheet.

On 25th June, the management board of Wirecard AG decided to file for the opening of insolvency proceedings. The company states this is due to “impending insolvency and over-indebtedness”, adding that it was unlikely to repay loans of €1.3 billion due in July without agreement with lenders.

The company said that its subsidiary Wirecard Bank would not be part of the insolvency proceedings for Wirecard AG which will be with the district court of Munich. Wirecard Bank has been placed under the supervision of German banking regulator Bafin.

Also, former chief operating officer Jan Marsalek was dismissed as a member of the Wirecard management board. His employment contract has been terminated. According to news reports, he is currently a fugitive in the Philippines.