Luckin Coffee drops co-founder Charles Lu Zhengyao as chairman of new board, keeps investors guessing on who’s in charge of scandal-tainted chain

Luckin reconstitutes boardroom with more members, a week after a special meeting in Beijing

SEC filing does not indicate if co-founder Lu has offered to resign or been removed

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A delivery man leaves a Luckin Coffee outlet in Beijing. The coffee chain is preparing to be delisted from Nasdaq after an accounting scandal. Photo: Reuters

Published: 9:46am, 14 Jul 2020Updated: 11:00pm, 14 Jul 2020

Corrected [10:52am, 14 Jul, 2020]

[10:52am, 14 Jul, 2020]
Corrects the yuan value of fabricated sales in the third paragraph

Luckin Coffee has announced a new board chairman and added two more independent directors, leaving questions about who is in charge of the Chinese coffee-chain after burning global investors in an accounting scandal.

The company named Guo Jinyi as board chairman in an SEC filing in New York, without saying if co-founder Charles Lu Zhengyao has resigned or been removed during a July 12 board meeting. Guo was also appointed as Chief Executive, after holding the role in caretaker capacity to steady the ship during an internal probe into its scandal.

The board reconstitution came as Luckin Coffee prepares to be booted out from Nasdaq, barely 14 months after its stock debut to great fanfare in New York. An internal probe found several top executives fabricated about 2.12 billion yuan (US$300 million) worth of sales in 2019. The stock has lost 95 per cent of its value, erasing US$11 billion from its market value since the revelation in early April.

The Xiamen, Fujian-based start up chain said it added Cha Yang, a lawyer and president of Tsinghua Education Foundation in New York, and Liu Feng, an accounting professor at Xiamen University, as independent directors at the July 12 meeting, according to its filing late Monday.

The filing came more than a week after the Xiamen, Fujian-based start up, dubbed as China’s Starbucks, went silent on the outcome of a special shareholders vote on July 5 in Beijing to remove four directors. Lu’s position as the board chairman was not among the meeting agenda.

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Luckin Coffee drops co-founder Charles Lu Zhengyao as chairman of new board, keeps investors guessing on who’s in charge of scandal-tainted chain

.css-1mniedq{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;} Luckin reconstitutes boardroom with more members, a week after a special meeting in Beijing SEC filing does not indicate if co-founder Lu has offered to resign or been removed

Luckin reconstitutes boardroom with more members, a week after a special meeting in Beijing

SEC filing does not indicate if co-founder Lu has offered to resign or been removed