The troubled Chinese coffee chain Luckin Coffee issued an official apology statement on Weibo regarding the recent fraud allegations that saw the company’s stock dip nearly 80%.
“The executives and employees involved have been suspended for investigation. Luckin Coffee’s board of directors has entrusted a special committee composed of independent directors and an independent third-party organization appointed by the committee to conduct a comprehensive and thorough investigation. The company will disclose the results of the investigation to the public as soon as possible and take all necessary remedial measures to avoid all problems arising from this matter,” the announcement read.
Lu Zhengyao, chairman of Luckin Coffee, previously posted regretful messages in his WeChat moments. He noted that no matter what the final findings of the independent committee are, the company will accept them with all due responsibility. Currently, Luckin’s thousands of stores across the country and tens of thousands of employees are still operating normally.
In the wake of the incident, Lu Zhengyao was confronted by internet users for being too positive in his WeChat posts, to which he responded that he needed to cheer the company’s front-line employees. At this time, Lu believes, it is necessary to stabilize operations and continue to serve customers.
In another post, Lu Zhengyao admitted, “The company has been running too fast in the past two years, causing a lot of problems. Now I have taken a bad fall. As the chairman of the board, I am responsible for it! I sincerely apologize to everyone through my WeChat moments – sorry everyone!”
Luckin Coffee has been under fire for the past week after the company revealed in an SEC filing an internal investigation into an alleged $300 million in fraud, perpetrated by the firm’s former COO. The announcement led the company’s stock to plummet roughly 80% on Thursday. Luckin Coffee’s market cap is now slightly above $1.1 billion according to Yahoo Finance, a considerable drop from its post-IPO valuation of nearly $4 billion.