Luckin Coffee asked to reverse boardroom changes after co-founder’s ouster, as China prepares to wield big stick for accounting fraud

Luckin Coffee, the coffee chain dubbed as China’s Starbucks, has been asked by some shareholders to reverse some of its boardroom changes in July following the ouster of its co-founder and chairman, as Chinese regulators prepare to clamp down on accounting fraud.

Hong Kong-based Centurium Capital is seeking to reinstate Sean Shao as a director and remove Jie Yang and Ying Zhen as independent directors, the company said in US exchange filings on Monday. These would undo the changes that took place at a shareholders’ meeting on July 5.

The two independent directors, however, have resigned from the board with immediate effect, Luckin said in a separate filing. The duo were both reported by local Chinese media to be the nominees Haode Investment, the family trust of co-founder Charles Lu Zhengyao. Lu was separately removed as chairman at a board meeting on July 12.

Luckin has called for an

Read More

China says to penalise Luckin Coffee for accounting fraud

BEIJING (Reuters) – Chinese regulators said they would penalise Luckin Coffee after confirming accounting fraud that has already forced the company to delist from the U.S. Nasdaq exchange.

The Ministry of Finance, which began an investigation into Luckin Coffee (China) and Luckin Coffee (Beijing) in early May, found Luckin booked 2.25 billion yuan ($322.60 million) of sales through fake coupons from April 2019 to the end of last year, it said in a statement on its website on Friday.

It also found Luckin inflated sales by 2.12 billion yuan during the period, while costs were inflated by 1.2 billion yuan and profits by 908 million yuan.

The ministry said that it would now impose administrative penalties on Luckin, without giving further details.

The State Administration for Market Regulation said in a separate statement, again without giving details, that it too would take action against the two domestic entities of Luckin

Read More

Subscribe US Now