A day after reports suggested that Audi’s CEO might be looking at a big exit payout from the company, Volkswagen group has terminated the jailed CEO’s contract against a backdrop of a criminal investigation for his involvement in the company’s infamous diesel emission scandal.

Reports suggest that the Munich prosecutors are currently investigating Stadler along with another Audi employee for being prime suspects for fraud and false advertising pertaining to the manipulated emission figures of the vehicles.

Stadler who was still in contract with the company will leave the post as the CEO of Audi and as the management board member of Volkswagen with immediate effect.

Post his arrest in mid-June, Stadler was suspended by the company for his involvement in the scandal. “Mr Stadler is (leaving) because, due to his ongoing pre-trial detention, he is unable to fulfil his duties as a member of the management board and wishes to concentrate on his defence,” VW said in its statement on Tuesday.

In his absence, Audi’s sales executive Bram Schot was appointed to be his interim replacement. In a statement, Schot thanked Stadler for his 11-year service stating that the company had doubled its sales in that time and that Stadler was one of the flag-bearers for Audi’s works on electric cars.

According to reports, the severance payments for Stadler after the termination of the contract will depend on the course of the investigation.