Two leading executives at Luckin Coffee were dismissed this month as the Chinese retail chain attempts to survive an ongoing accounting scandal.
Jenny Zhiya Qian and Jian Liu were fired May 11 as the probe continues into allegedly fraudulent sales reporting, according to published reports. Qian, the company’s c.e.o., lost her job along with c.o.o. Liu, who is the alleged architect of the scheme.
Jinyi Guo, a senior vice president and board director, steps in acting c.e.o.
Luckin announced on April 2 that it suspended Liu after an internal company investigation revealed Liu allegedly fabricated sales totaling $310 million in 2019. Six other employees who were either involved or had knowledge of the matter were also suspended or placed on leave.
Luckin Coffee was in the midst of a battle with Starbucks for the Chinese retail coffee market. The company went public in May 2019 and reported strong revenue growth. By late 2019, Luckin reported having 3,680 stores and a 200% increase over the previous year.
Since the April discovery, however, trading of Luckin stock on the Nasdaq stock market has been stopped and stock value plummeted more than 80% in early April. The retail stores continue to operate while the investigation continues.