Photo/Lan Suying (NBD)

May 13 (NBD) -- Chinese coffee startup Luckin Coffee (Luckin, Nasdaq:LK) said Tuesday that it has dismissed two top executives after internal investigation discovered more information on the massive sales fraud.

The board of Luckin said in an announcement it has terminated its founder Qian Zhiya from the position of chief executive officer, and Liu Jian from the position of chief operating officer, based on evidence that "sheds more light" on the fabricated transactions revealed in April.

Luckin did not specify on the new findings, but said it has been cooperating with regulators from both China and the U.S. on investigation.

Liu and several of his subordinates were described as responsible for a sales fabrication worth of 2.2 billion yuan in 2019, according to a statement issued by Luckin on April 2. Shares of Luckin fell to the rock bottom after the announcement, and trading has been halted since April 7.

Luckin's stock was trading at 4.39 U.S. dollars a share before it was halted for trading. That's nearly 75 percent below its IPO price of 17 U.S. dollars.

The board also demanded Qian and Liu to resign from the board, which they did. Six other employees involved in or had knowledge of the fabrication have been either suspended or put on leave.

The announcement did not mention Lu Zhengyao, chairman of the board at Luckin, but it is noted that Lu has been removed from the board's Nominating and Corporate Governance Committee, which Lu had previously chaired.

Luckin appointed co-founder Guo Jinyi as the company's acting CEO. National Business Daily noted that before joining Luckin, Guo was an executive at CAR Inc., a car rental company founded by Lu.

Guo was known for his fierce attack on Starbucks China back in May, 2018, when he accused the world's biggest coffee chain of abusing market dominance to sign exclusive deals with property management companies and suppliers, and threatened litigations.

Ever since the sales fabrication scandal broke out, there have been rumors that the stock of Luckin will eventually be delisted and that Luckin could even file for bankruptcy. In response to the news report that "Luckin is to be taken over", the coffee chain said on April 27 that it is actively cooperating with the market regulators' investigation, and the company and its outlets nationwide operate normally.

Email: gaohan@nbd.com.cn