Luckin Coffee founder Lu Zhengyao is preparing to launch a noodle restaurant chain after he was removed from his chairmanship of Luckin in July 2020, 36Kr reported on Wednesday. The noodle chain may be called Xiaomian Riji, or Noodle Diary.
Lu was Luckin’s head when the company contended with fallout from financial fraud. Luckin paid a USD 180 million fine to the US Securities and Exchange Commission in December 2020, after the SEC charged the company with defrauding investors by misstating revenue and net operating losses to appear it was meeting earnings estimates, and on an extremely fast growth trajectory. In particular, the company fabricated USD 300 million in sales in its books. Lu himself did not face criminal charges.
Luckin’s former CEO Qian Zhiya as well as vice presidents Li Jun and Zhou Bin have all joined Lu’s new venture, which may involve 500 noodle restaurants. None are open yet, but one location is under renovation in Beijing’s bustling Wangjing neighborhood, people familiar with the matter told 36Kr. Lu is actively recruiting former and current Luckin employees to join his noodle chain.
However, the China Securities Regulatory Commission issued a warning to Lu in November and levied two fines totaling RMB 300,000 (USD 46,500) for information disclosure malpractices of two companies, Ucar and Beijing Qingdong Yiwei Technology Company Limited, where he served as chairman and general manager, respectively.
Who is Lu Zhengyao?
Born in 1969 in Fujian Province, Lu’s first job was as a public servant with the local government in Shijiazhuang, Hebei Province, after graduating from the University of Science and Technology Beijing in 1991.
He resigned three years later to establish a company called Ditel Technology in Beijing to distribute telecommunication equipment and then founded another company to provide VoIP services to enterprises in 2003.
In 2007, Lu founded Car Inc. as an auto rental business and listed the company on the Hong Kong Stock Exchange in 2014. He also ventured into the ride-hailing sector by launching Ucar, which was listed in 2016 on the New Third Board, China’s main over-the-counter equity market.
Lu founded Luckin Coffee in 2017 and brought the company to the Nasdaq in May 2018, but fell from grace after Luckin’s financial misconduct surfaced in April 2020.