Luckin Coffee Inc., the Xiamen-based Chinese coffeehouse chain founded in Beijing in 2017, had ousted its Chairman and co-founder Charles Zhengyao Lu on Monday, who would be succeeded by the former acting CEO of the company Jinyi Guo, the fiscally embattled Chinese coffeehouse chain, apparently the fastest-growing chain store start-up having had 4,507 holdings had disclosed in a statement earlier on Monday.
Apart from that, the Chinese Coffeehouse chain store operator, which was anticipating a sharp nosedive at its operating profit in the past quarter following a nearly three-month long pandemic induced lockdown in China, had added that Guo would also act as the Chief Executive of the company apart from being the Chair of the Chinese coffeehouse chain.
An internal fraud of $300 million in fake sales lead to the ousting of Lu
In point of fact, latest move from the Chinese coffeehouse store chain operator serving over 3,600 locations across the world’s second-largest economy, came forth weeks after a proposal to oust Lu as the board Chair following an internal fraud investigation had botched to secure the board approval.
Nonetheless, earlier this month, the Chinese coffeehouse chain store operator had been hit with an internal probe that revealed an upsum of $300 million in fake sales, which eventually had prompted the board of directors to approve the proposed ousting of Lu.
On top of that, later last month, following reveal of the internal fraud investigation in Luckin Coffee’s balance sheet, the New York Stock Exchange had removed the US-listed stocks of Luckin Coffee.
Apart from that, followed by the ousting of Lu, the Chinese billionaire entrepreneur who retains the controlling stakes in Luckin Coffee Inc. and founded the Chinese auto-rental firm Car Inc. alongside a Chinese version of Uber, Ucar Inc., the company said in a statement on Monday that after an extraordinary general meet of shareholders that took place on July 5, the company had decided to remove four of its directors from the management board including Lu and had approved Guo’s succession as the Luckin Coffee Chair and CEO.