(Yicai Global) April 9 -- A company controlled by fraud-stricken Luckin Coffee’s lead shareholder Lu Zhengyao has begun selling off shares in affiliate China Auto Rental, China’s biggest car leasing firm and a secondary victim of book-cooking backlash at the Starbucks’ rival.
UCAR sold nearly 46.5 million shares in CAR, or 2.11 percent of outstanding shares, on April 3, CAR said in a statement today. Shares in the company [HKG:0699] opened at HKD4.15 (54 US cents) on the day of the sale, but sat at just HKD1.96 when the firm suspended trading at 10.30 a.m. the same day, placing the value of the deal anywhere between HKD91 million (USD11.7 million) and HKD193 million.
Shares in CAR plummeted due to the connection with Luckin Coffee, who said on April 2 that its chief operating officer had fraudulently augmented sales to the tune of CNY2.2 billion (USD310.4 million). CAR has since denied any close links to the coffee chain, saying on April 7 that it holds zero equity in the company and does not engage with it in any commercial deals.
UCAR is also holding talks with potential buyers to let go of its remaining equity, CAR said today, adding that the discussions are still in preliminary stages and no terms have been agreed.
Lu holds nearly 40 percent of UCAR’s outstanding shares and following the sale, UCAR will hold 27.65 percent of CAR’s share capital through a wholly owned subsidiary.
Editor: James Boynton