According to documents submitted by Ruixing Coffee to the U.S. Securities and Exchange Commission (SEC), on July 2, the board of directors of Ruixing Coffee held a meeting to consider the proposal of the special committee of the board of directors to remove Lu Zhengyao as director and chairman. . According to Article 101 of Luckin Coffee’s Articles of Association, the proposal to remove Lu Zhengyao did not receive the votes of more than two-thirds of the other directors who attended the board of directors and voted at the meeting. Therefore, Lu Zhengyao will continue to serve as director and chairman of the company. ?

But just a few days ago, Luckin Coffee announced that the company’s internal investigation has been basically completed and it has obtained Lu Zhengyao’s instructive emails regarding the company’s financial fraud. The special committee of the board of directors found that the financial fraud began in April 2019, and the company's net revenue in 2019 was exaggerated by approximately 2.12 billion yuan (250 million yuan in the second quarter, 700 million yuan in the third quarter, and 1.17 billion yuan in the fourth quarter). This figure is almost the same as the 2.2 billion yuan that Ruixing revealed in April this year for fraud.

Judging from the current results, Ruixing’s current management is still on Lu Zhengyao’s side. Lu Zhengyao won temporarily. On July 5, the main purpose of the shareholders' meeting controlled and initiated by Lu Zhengyao was not to remove himself, but to eliminate Li Hui and Liu Erhai. Although Lu Zhengyao has retained his position for now, the future is still full of variables.

According to Cayman Islands court documents, there will be two sentencing notices related to Ruixing on July 6. The plaintiff is Credit Suisse Group. One of the defendants is Summer Fame Limited, which is controlled by the family trust of founder and CEO Qian Zhiya. Qian Zhiya holds 15.43 shares of Luckin Coffee; the second defendant is Haode Investments, chairman of Ruixing Coffee Lu Zhengyao holds 23.94% of Ruixing Coffee’s shares mainly through his family trust Haode Investment. If Credit Suisse wins the lawsuit, the above shares will be owned by Credit Suisse and other investment banks, and Lu Zhengyao will lose his board of directors qualifications and voting. Once Lu Zhengyao's shares are liquidated, Dacheng Capital will become the largest shareholder and can initiate new board of directors and shareholders' meetings.