Beijing Court Freezes Ucar Chairman's Shares Over His Part in Luckin Coffee Fraud
Liao Shumin
DATE:  Jun 11 2020
/ SOURCE:  Yicai
Beijing Court Freezes Ucar Chairman's Shares Over His Part in Luckin Coffee Fraud Beijing Court Freezes Ucar Chairman's Shares Over His Part in Luckin Coffee Fraud

(Yicai Global) June 11 -- A court in Beijing has frozen the 270 million shares that Chairman Charles Lu holds in ride-hailing service provider Ucar due to his role in the Luckin Coffee financial scandal.

Beijing First Intermediate People’s Court froze the more than 10 percent stake in Ucar after Chinese regulators found Lu greenlit Luckin’s attempt to tack on USD2.2 billion to its 2019 revenue figure, Ucar said in a statement yesterday.

Lu, Ucar’s largest shareholder and also chairman of Luckin and China Auto Rental, could be prosecuted and will most likely face criminal charges, the statement added.

Lu acts in concert with Star Vantage China and Golden Ares, Ucar’s second- and third-largest shareholders, to combine for a total of more than 34 percent of the company’s equity. If the court forces the sale of Lu’s shares, it could result in a change of control.

Ucar is still operating as normal, the New Third Board-listed firm added, saying the injunction has not impacted production or operations. The company’s main operations include running ride-hailing platform Shenzhou Zhuanche, car rental firm Shenzhou Zuche and auto brand Borgward.

Ucar has also penned a non-binding deal to sell its 21.26 percent in China Auto Rental, China’s biggest car leasing firm, to Beijing Automotive Group, it said on June 1. The stake is Lu and Ucar’s entire holdings in the target.

If the deal goes ahead, which is looking likely after Lu resigned from his post as chairman of CAR yesterday, BAIC would be Shenzhou Car Rental’s largest shareholder. Shares in CAR shot up by as much as 20 percent after Lu announced his departure.

Editor: James Boynton

Follow Yicai Global on
Keywords:   Ucar,Lu Zhengyao