China's would-be Starbucks rival Luckin Coffee has removed its co-founder and chairman after a scandal involving fake sales figures that resulted in the company being delisted from the United States Nasdaq and the ouster of two top executives.
Luckin's billionaire founder Charles Zhengyao Lu has been replaced as chairman by Jinyi Guo, previously the acting chief executive officer, the embattled coffee chain said in a statement on its website dated Monday, July 13.
Guo will also take over as CEO.
The announcement came days after company directors had voted to keep Lu on the board despite an internal investigation that found the company had inflated its 2019 sales revenue by some 2.12 billion yuan ($311 million).
Luckin was delisted from Nasdaq earlier this month after suspending trading on June 29, having been asked to do so by the exchange.
Lu's removal had increasingly been seen as a key step for the company to move forward and begin repairing its tarnished brand.
Its shares had been in freefall since April after the company revealed that a top executive had cooked the books.
Apart from the inflated revenue, Luckin's 2019 costs and expenses were also inflated by 1.34 billion yuan, the internal investigation found.