Goldman Sachs said Tuesday it would seize and sell Luckin Coffee shares from Luckin’s co-founder and chairman, Lu Zhengyao.
Lu is trying to distance himself from his other companies to limit the fallout, the Financial Times reported Wednesday. His other businesses include China Auto Rental and Ucar.
China Auto executives told FT that Lu would consider stepping down as chairman of the car rental company as a way to convince investors of the business’ independence from Luckin.
GS said Lu defaulted on the terms of a $518 million margin loan.