It is learned on November 21 from Xinjing News, in the corporate governance report released by Luckin Coffee, Guo Jinyi, chairman and CEO of Luckin Coffee, stated that after more than two years of hard work, Luckin Coffee has completed overseas debt restructuring and ended bankruptcy proceedings. And in the first quarter of this year, it achieved a single-quarter profit for the first time, maintained a high-speed growth in the second quarter, and completed a complete separation from historical problems, bringing the company back on track.
It is understood that this is the first corporate governance report released by Luckin Coffee. Luckin Coffee hopes to enhance the understanding of all relevant parties through the disclosure of corporate governance reforms, current governance concepts and governance structures, and further promote the company’s healthy, stable and sustainable development. In August 2022, Guo Jinyi announced at the performance conference call that in the fourth quarter, Luckin Coffee plans to release relevant reports on corporate governance, conducting a systematic review of Luckin Coffee’s radical changes in corporate governance, cultural values, and other key issues in the past two years.
The corporate governance report released this time shows that Luckin Coffee has reviewed a series of changes since the outbreak of financial fraud. On April 2, 2020, Luckin Coffee voluntarily reported to the US Securities and Exchange Commission (SEC) and disclosed to the public that there were transaction frauds from the second quarter to the fourth quarter of 2019. Luckin Coffee stated that it immediately established a special committee composed of independent directors at the board level to investigate the truth of the incident, promoted the implementation of internal control enhancement measures, quickly carried out drastic reforms to the governance and management levels, quickly responded to external regulators and Investors’ appeals, and actively contributed to reconciliation.
In order to completely solve the problems left over from history, ensure fundamental changes, and implement the core values, Luckin Coffee has completely reshaped the corporate governance system. Luckin Coffee has established a corporate governance structure with clear division of labor, equal rights and responsibilities, and effective checks and balances. Under the supervision of the board of directors, the management team effectively organized the operation and management work, reshaped the company’s business philosophy and business style around the new strategic direction, and strictly controlled internal control and compliance. The development plan has been implemented into specific actions to promote the practical implementation of the company’s operations.
According to the report, in the future, Luckin Coffee will continue to conduct self-examination, promote the continuous standardization of the systems and processes of each business line, and improve the comprehensiveness and directness of risk control points, so as to better meet the needs of internal control management supervision and external compliance supervision requirements . In addition, Luckin will combine the strategic development needs of different stages, focus on the effectiveness of internal management, pay attention to the potential impact of external risks, form a closed-loop management mechanism, and continue to promote the improvement of the risk management system.