Luckin Coffee Shareholders Vote to Remove Chairman, Report Says

Luckin Coffee Shareholders Vote to Remove Chairman, Report Says

(Bloomberg) -- Luckin Coffee Inc.’s chairman, Charles Zhengyao Lu, was ousted by shareholders from the scandal-plagued Chinese company, just days after surviving an effort by some directors to strip him of control, Chinese web portal 163.com reported, citing unidentified sources. Three other board directors including Sean Shao were also removed at an extraordinary shareholders meeting in Beijing on Sunday, according to the report, and Ying Zeng and Jie Yang will be added as independent board directors. The removal of Lu is the culminating step in a major shakeup of top management since fabricated transactions dating back to April 2019 came to light earlier this year. The coffee chain already fired its chief executive and chief operating officers, among other employees, in May as it came under investigation by Chinese and U.S. regulators. The voting result ended a temporary reprieve for Lu, who remained chairman after a proposal to remove him from the startup he founded wasn’t approved by the required two-thirds of directors at a special meeting Thursday. According to Luckin’s Articles of Association, a director can be removed by shareholders or other board directors. Luckin’s executive shakeup is an unusual case in China, where it’s rare for a private startup to oust a founder and chairman, who is considered the soul of the firm. Lu and others were removed in a bid to distance the company from the financial scandal and allow it to continue operating more normally. Lu’s dismissal comes after Luckin said it substantially completed ...
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