Luckin Coffee personnel celebrate during the company’s debut on the Nasdaq stock exchange. Photo credit: Nasdaq/Luckin Coffee

Luckin Coffee, a Chinese coffeehouse chain that grew rapidly in a short time and stood as a challenger to coffee powerhouse Starbucks in China, has announced the termination of its long-running chief executive Jenny Qian alongside its chief operating officer (COO) Jian Liu on the heels of an accounting scandal that has rocked the company and led to a massive plunge in the value of its shares.

About six weeks ago, Luckin Coffee notified investors that it had found evidence of fabrication of sales to the tune of 2.2 billion Chinese yuan ($310 million) running through the second quarter to the fourth of last year. The company also stated that “certain costs and expenses were also substantially inflated by fabricated transactions” during the period. Luckin set up a committee to look into the matter and warned that investors should no longer rely on its previous financial statements released for the nine months preceding the 30th of September, 2019.

The scandal was mostly blamed on the company’s COO, Jian Liu, alongside several employees reporting to him. As of the time of the announcement, Liu was already suspended from the company amid ongoing investigations. With the new announcement, that suspension has apparently graduated into a termination that also dragged Luckin’s CEO, Jenny Qian, along. Alongside the two executives, six other unnamed employees have also been suspended or placed on leave.

Luckin has tapped one of its executives, a Senior Vice President to be precise, to become its acting chief executive. The company’s scandal has already drawn inquiries from regulatory authorities in both the U.S. and China. Luckin says it’s cooperating with the regulatory agencies as it also furthers its own internal investigations.