The board of directors of Luckin Coffee, which is embroiled in the financial fraud controversy, voted at an extraordinary general meeting held on September 2 to approve a resolution to reinstate Sean Shao as an independent director.
On July 3, Luckin Coffee disclosed that the resolution to remove Lu Zhengyao as chairman and director was not approved by the board of directors and that Lu Zhengyao continued to take the helm of Luckin Coffee.
On July 5, Lu Zhengyao initiated an extraordinary general meeting at which resolutions were voted on, including the removal of Lu Zhengyao's own directorship, the appointment of Li Hui and Liu Erhai as directors, and the appointment of Sean Shao as an independent director.
It is not difficult to see that the "Shenzhou faction" led by Lu Zhengyao and the "investors" represented by Li Hui and Liu Erhai are engaged in a fierce struggle for the leadership of Luckin Coffee.
According to several media reports back then, the extraordinary general meeting of Luckin Coffee held on July 5 voted to approve the removal of Lu Zhengyao, Li Hui, Liu Erhai and Sean Shao as directors.
At the same time, the meeting voted to add two independent directors, Ying Zeng and Jie Yang, to the Board.
This also means a complete "reshuffle" of the board of directors of Luckin Coffee.
According to Hao Junbo, one of the lawyers representing Luckin Coffee's investors and director of Hao Junbo Law Firm, the reshuffling of Luckin Coffee's board of directors will allow the new board of directors to cut through the allegedly fraudulent management and may bring some new development opportunities.
This may be exactly the situation Luckin Coffee would like to see.
But it's also important to note that Luckin Coffee's highest market capitalization since its IPO approached $13 billion, leaving it with a total market value of only $347 million when it delisted.
Luckin Coffee was in disarray due to internal struggles for control, and now with Sean Shao's reinstatement as an independent director, Luckin Coffee is poised for a turnaround.
In the US Pink Sheet Market, Luckin Coffee is down 1.36 percent to trade at $2.91 as of press time.
