Luckin Coffee: no evidence has been found to prove the improper behavior of CEO Guo Jinyi

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The financial fraud scandal seems to be a thing of the past for Luckin, China's coffee unicorn, and the old management is vying with the new management for control of the company.

According to the China Business Daily, the task force of Luckin Coffee’s board of directors has concluded its internal investigation into the current chairman and CEO Guo Jinyi and found no evidence of wrongdoing. Luckin Coffee said the board will continue to fully support Dr. Guo and his management team.

Earlier, Luckin Coffee’s seven vice presidents and a number of senior executives jointly called for the removal of the current chairman, Guo. The joint letter called it “corrupt, immoral and incompetent, affecting the development of the company.”

The joint letter was sent to Luckin Coffee’s board of directors and Centurium Capital, which mainly accused Guo Jinyi of three “crimes”:

1. Corruption, fraud through false suppliers, harm to the interests of the company.

2. Abuse of power and nepotism.

3. It has caused great hidden trouble to the company because of its low personal working ability.

The letter demands that the board of directors and major shareholders immediately remove the chairman and CEO of Guo and appoint a new management of the company as soon as possible. At the end of the letter, there are a total of 24 signatures and handprints, including seven vice presidents and directors, as well as branch general managers.

In this regard, Luckin Coffee Chairman Guo Jinyi released an internal email. The email said that the report letter was drafted by Lu Zhengyao, Qian Zhiya and other former managers of the company on January 3. Some of the employees concerned did not know the truth and were blackmailed into signing. He said, “I personally immediately asked the board of directors to set up an investigation team to investigate me about the incident, so as to restore the truth!” I have assured the Board that I will not interfere with the work of the investigation team and cooperate fully with the investigation. “

Luckin Coffee is the largest local coffee chain in China. It was born in 2017. It has attracted a lot of attention for its rapid growth and is now Starbucks’ biggest competitor in China. But in 2020, it was triggered by the SEC crisis because of financial fraud. According to previous reports, by the end of 2020, the company’s main business had been separated from the impact of financial fraud.

Lu Zhengyao and Qian Zhiya, the founders of the company, had been the main managers of Luckin Coffee before the financial fraud. Guo Jinyi, who is also the co-founder of the company, has served as temporary CEO, legal representative and executive director of the company since June 2020.

⚠️ Investor Alert ⚠️

Panda!Yoo is not a professional financial media. You are reading an article about Chinese companies listed overseas. The original intention of our report is to show the consumption trend in China. We quote the comments on the company and its products in the Chinese media, which are not financial advice. You should never use this article as key information for investment decisions.

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