Embattled Chinese beverage chain Luckin Coffee issued an apology letter to its employees on Tuesday evening for the upheaval following its stunning fraud admission in early April.

Why it matters: Luckin had remained relatively silent about its moves following the April 2 disclosure of fraud to the US Securities and Exchange Commission. The apology and appointment of new leadership on the same day mark a distinct change in leadership style.

  • The company on Tuesday fired CEO Qian Zhiya and COO Liu Jian from their positions.

Details: “We would like to express our sincere apologies for all the troubles the incident has brought upon your family,” the company said in a letter addressed to its employees on Tuesday, according to Chinese media reports.

  • The company said that it is grateful to its employees for their hard work in maintaining normal operations of stores, supply chain, and product innovation during a difficult time.
  • The board has appointed Guo Jinyi as acting CEO of the company to oversee the firm’s daily operations as the fraud investigation continues.
  • Like his predecessor Qian Zhiya, Guo was also formerly an executive with Car Inc., the car rental firm backed by Luckin chairman Lu Zhengyao.
  • The company named new board members Wu Gang, a longtime Mcdonalds executive and a Luckin senior vice president, and Cao Wenbao, an airline executive.
  • The Starbucks challenger also pledged in the letter to restructure the company and rebuild its values under its new leadership.

Context: Luckin disclosed in early April that its COO had fabricated around $310 million in sales in 2019, triggering a plunge in share price of around 80%.

  • US regulators, as well as China’s top market regulators, have launched probes into Luckin Coffee.

Updated: added detail about Luckin’s two new board members.

Emma Lee

Emma Lee is Shanghai-based tech writer, covering startups and tech happenings in China and Asia in general. We are looking for stories related to tech and China. Reach her at lixin@technode.com.