Charles Lu Zhengyao
VCG | fake pictures
Luckin Coffee has expelled co-founder and president Charles Zhengyao Lu and replaced him with Jinyi Guo, who will also be the chief executive, the conflicting coffee chain revealed Monday.
Guo was previously the interim CEO of the company.
The move to replace Lu comes just weeks after Luckin said he would remain as president after a proposal to remove him, stemming from an internal fraud investigation, failed to get board approval.
Earlier this month, the China-based coffee chain concluded an internal investigation into fake annual sales of roughly $ 300 million, after which several of its directors proposed Lu’s expulsion.
Directly competing with American coffee Starbucks, Fortunes of Luckin has plummeted since the investigation was unveiled in April, and the Nasdaq suspended trading in its shares in June.
Lu, Luckin’s controlling shareholder, is also the founder of car rental company Car and Chinese transport company Ucar.
The company said it removed four directors from its board, including Lu, and appointed two new directors after an extraordinary general meeting of shareholders on July 5 and a board meeting the following week.
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