The police issued Sunday an arrest warrant for Boaz Yona, the CEO of Heftsiba, the construction company that filed for bankruptcy last week.
The company's former Chief Financial Officer, Zeev Tennenbaum, was arrested on Friday. His remand has been extended by seven days
Tennenbaum is suspected of fraud, corporate breach of trust, conspiracy to commit fraud, false registration of corporate documents, theft as well as a number of financial violations.
The Jerusalem Magistrates Court on Sunday night granted Heftsiba temporary bankruptcy status, and ordered its management to draft a recovery plan.
The court also froze all of Heftsiba's assets, leaving 500 new home owners without their properties and bank guarantees.
Naama Sikuler contributed to this report