The embattled Chinese coffee chain has named Jinyi Guo president and CEO after shareholders voted to remove co-founder and former president Charles Zhengyao Lu, Luckin said in a regulatory filing on Monday.
Luckin went public last year and increased due to what appeared to be strong sales growth. But then the company, which was once hailed as China’s local rival Starbucks (SBUX) – admitted in April that a good portion of its 2019 revenue was manufactured. His actions collapsed after the revelations.
Luckin’s shares fell nearly 93% during the year, and Nasdaq decided to remove the company from the list.
Guo has been the interim CEO since May, after Luckin fired CEO Jenny Zhiya Qian and COO Jian Liu, the executive who the company says was the architect of the fraud. Earlier this month, the company said it laid off 12 other employees who, under the direction of Qian and Liu, participated in or were aware of the fabricated transactions.
Before being elected to the top position, Guo was Luckin’s senior vice president in charge of the supply and product chain. He also previously worked as an assistant to the president of UCAR, a company founded by Lu.
Lu has been under pressure as the scandal sparked an offensive against Chinese companies listed in the United States. The businessman apologized earlier this year, saying he was in “deep pain and remorse” over the situation.
“I can’t sleep at night,” he said in a statement in May, which was widely reported by several Chinese media outlets, including The Paper and China Business Network, both owned by state-controlled corporations. He also insisted that he “did not play tricks” to deceive investors.
It’s unclear what’s next for Luckin now that he will no longer have access to the stock market to raise new capital. At the end of last year, the company had 3,680 stores.
– Paul R. La Monica contributed to this report.
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