Luckin Coffee Fires CEO and COO After Sales Fraud Probe
Posted on 05/12/2020
Chinese beverage chain Luckin Coffee Inc., which had its initial public offering and had backing from sovereign wealth funds like Singapore’s GIC Private Limited, terminated its CEO Jenny Zhiya Qian and COO Jian Liu. Both officials also resigned from the company’s board of directors. Luckin Coffee’s board appointed Jinyi Guo, a board member and a senior vice president in the company, as acting chief executive officer. Since the news of inflated sales figures, the Luckin Coffee shares have plunged over 80%.
The terminations stem around an internal probe that Jian Liu had manufactured 2019 sales figures by roughly 2.2 billion yuan. Luckin Coffee retained law firm Kirkland & Ellis LLP as its independent outside counsel and FTI Consulting as an independent forensic accounting expert.