Jenny Qian Zhiya, CEO Luckin Coffee Inc. during the company’s IPO at Nasdaq New York, May 17, 2019.

Luckin Coffee terminates CEO Jenny Zhiya Qian and COO Jian Liu on Tuesday after an investigation into an accounting fraud where the COO had fabricated $310 million in 2019 sales.

The revelation has caused Luckin’s share price to fall by around 80%. Today, the company’s market capitalization is estimated at $1 billion. It also has sparked major due diligence questions for the Wall Street banks that led both Luckin’s IPO and its subsequent offerings. The company also placed six other employees on leave pending investigation.

Luckin today issued the following statement:

“During its ongoing internal investigation, the Special Committee of the Board has brought to the attention of the Board evidence that sheds more light on the fabricated transactions described in the press release issued by the Company on April 2, 2020. After considering such information, the Board has terminated Ms. Jenny Zhiya Qian and Mr. Jian Liu from the positions of the Chief Executive Officer and the Chief Operating Officer, respectively. The Board also demanded and received from Ms. Qian and Mr. Liu their resignations from the Board. In addition to Ms. Qian and Mr. Liu, since the beginning of the Internal Investigation, the Company has placed six other employees, who were involved in or had the knowledge of the fabricated transactions, on suspension or leave.”

The backstory which we featured last April disclosed hat its COO had fabricated around $310 million in 2019 sales.