What’s New: Luckin Coffee Inc. removed Chief Executive Officer Jenny Qian Zhiya and Chief Operating Officer Liu Jian amid an ongoing probe of a massive accounting scandal. Qian and Liu also resigned their board positions, according to a filing Tuesday by Nasdaq-listed Luckin.
Six others involved in the scandal were either suspended or placed on leave, the company said. Guo Jinyi, a board member and senior vice president, was named acting CEO.
Background: The Chinese coffee chain disclosed in late April that nearly half the revenue it reported for the last three quarters of 2019, or 2.2 billion yuan ($310 million), was fake. The company blamed COO Liu for the misconduct and said it initiated an investigation of Liu and other employees.
The company’s shares have been suspended for more than a month, following an 80% plunge in their value on news of the scandal. China’s securities and market regulators opened a probe into Luckin. The company delayed filing its annual results, saying it was unable to prepare the financial report amid the coronavirus pandemic.
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Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bobsimison@caixin.com)
Related: In Depth: Investors Sip the Bitter Taste of the Luckin Coffee Scandal
