Luckin Coffee Chairman Charles Zhengyao Lu and Chief Executive Jenny Zhiya Qian have handed over shares in the embattled Chinese coffee chain to lenders after a company controlled by Lu's family defaulted on a US$518 margin loan, one of the banks said on Monday.
FILE PHOTO: Charles Zhengyao Lu, non-executive chairman of Luckin Coffee, speaks during the company's IPO at the Nasdaq Market site in New York, U.S., May 17, 2019. REUTERS/Brendan McDermidHONG KONG/NEW YORK: Luckin Coffee Chairman Charles Zhengyao Lu and Chief Executive Jenny Zhiya Qian have handed over shares in the embattled Chinese coffee chain to lenders after a company controlled by Lu's family defaulted on a US$518 margin loan, one of the banks said on Monday.
The default comes after Luckin, a major rival to Starbucks in China, said last week that much of its 2019 sales were fabricated, sending its shares plunging as much as 82per cent in U.S. trading and sparking an investigation by China's securities regulator.
Luckin declined to comment. Lu Zhengyao did not immediately respond to a request for comment. It was not possible to contact Qian directly. If all the shares pledged under the US$518 million loan are sold, Lu Zhengyao's voting interest in Luckin Coffee would not decrease, while Qian's beneficial and voting interests would decrease significantly, Goldman Sachs said, without quantifying the size of the reduction.Luckin shares were down a further 13.8per cent in early trading in New York on Monday.
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