Luckin Coffee. Dismissal at the top at the “Chinese Starbucks”
It’s a lesson in terms of rushed investment. Oversupply of cash in the U.S. seeking a home pushed investors to rush into Chinese mobile applications, convinced at all costs that a population of 1.4 billion people must provide rich returns. In mid-May, the Luckin coffee chain removed the C.E.O. Jenny Zhiya Qian and the C.O.O. Jian Lui. Fraud was uncovered as declaring false sales of US$310 million during 2019. Six other executives involved were suspended. The NASDAQ-listed “Chinese Starbucks” stock fell from US$51.38 in January 2020 to US$ 4.39 in April 2020, a loss of US$5 billion. Before going public in the U.S., Luckin secured investments from Singapore’s sovereign wealth fund GIC Pte and China International Capital.