Jo Lernout and Pol Hauspie were reportedly arrested yesterday and charged with fraud. The allegations include stock manipulation and falsification of documents. Both are expected to appear in court on Monday morning.
L&H has been granted bankruptcy protection by a Belgian court, which said that it faces claims from creditors totalling almost £350m. It is also thought that the company has hired Credit Suisse First Boston to look at the possibility of a sale of its assets to repay the debt.
Both founders resigned from the company last year after it was revealed that revenue projections had been inflated, although they remain major shareholders.
L&H stock has been suspended from trading on the both the USA and European Nasdaq exchanges.