CHINESE coffee chain Luckin Coffee Inc. fired its chief executive and chief operating officers following an internal probe on fabrication of annual sales numbers, the firm said Tuesday.

Luckin, a major rival to Starbucks in China, revealed in April that much of its 2019 sales of about 2.2 billion yuan (US$310.77 million) were fabricated by its COO and other employees, who had been suspended while the company carried out its investigation.

Qian Zhiya and Liu Jian, who were CEO and COO respectively, will also exit the Luckin’s board.

The embattled coffee chain said it has been cooperating with and responding to inquiries from regulatory agencies in both the United States and China, who began an investigation into the company last month.

Meanwhile, Luckin’s chairman, Lu Zhengyao, and Qian handed over shares in the coffee chain to lenders after a company controlled by Lu’s family defaulted on a US$518 million margin loan.

Qian, who has led the company since November 2017, was also chief operating officer for ride-hailing service provider UCAR Inc. and auto rental company CAR Inc., both founded by Lu.

Liu, who became COO in May 2018, has also held senior roles in UCAR and CAR.

Luckin’s shares slumped more than 80 percent April 2, the day the probe was revealed, bringing their loss to 90 percent this year, and leading to a halt in trade since April 7.

The company said Guo Jinyi, a board director and a senior vice president, will take the top job on an interim basis.

Cao Wenbao and Wu Gang, in charge of store operations and customer service, and strategic partnerships teams respectively at Luckin, have been appointed to the board, replacing Qian and Liu.

Founded in June 2017, Luckin’s IPO had attracted several prominent U.S. investors, including hedge funds.

Luckin has been hit hard by the COVID-19 pandemic, which forced it to temporarily close about 200 coffee shops in the central Chinese city of Wuhan as well as many in other cities.

Shortly after the company admitted the fraud and as stores began to reopen, consumers installed the Luckin app on their phones and rushed to claim a free drink the company offers for downloading the app, worried the chain might collapse. (SD-Agencies)