Scandal-hit Luckin Coffee’s chairman Charles Lu Zhengyao survives move to oust him
- Proposal to oust chairman fails to get two-thirds voting majority at a board meeting
- Lu exits interests in Hong Kong-listed Car Inc. as state-owned SAIC takes over
Charles Lu Zhengyao, the former billionaire co-founder of Luckin Coffee, survived an effort to oust him as chairman after directors failed to get enough votes. It was the latest surprising turn of events for the scandal-hit company once dubbed “the Starbucks of China”.
Meanwhile, Lu is set to make an exit from Car Inc., China’s largest car rental firm that he also founded, after SAIC Motor, China’s largest carmaker, agreed to buy a 29 per cent stake in the firm from a company he controls and an investment firm.
A proposal to remove Lu from his position at Luckin put forward by a majority of the company’s directors failed to garner the necessary two-thirds votes during a board meeting on Thursday, Luckin said in a statement.
“As a result, Mr. Charles Zhengyao Lu will remain a director and the chairman of the board,” the company said.
The voting result came one day after an internal investigation concluded the coffee chain’s revenue in 2019 was inflated by 2.12 billion yuan (US$300 million), and the fabrication of transactions began in as early as April last year.
