Charles Lu Zhengyao, founder of China's car rental company CAR Inc., has resigned as both the chairman of the board and as a non-executive director of the firm with effect from June 9, 2020, the Hong Kong listed company announced in a filing on Wednesday.

Lu will no longer be a member of the company's nomination committee, the filing said, noting the move was to "devote more of his time to fulfill his commitment with UCAR Inc. and other business."

CAR went public in Hong Kong in 2014 but UCAR, a car hailing service provider which was launched in 2016, became the largest shareholder of CAR and also its biggest client, leading to investors worrying about two companies' complicated connection.

The filing also said that under the terms of facilities between CAR and certain lenders, if Lu ceases to be a director of the company, the lenders may declare loans of about 168 million U.S. dollars immediately due and payable but the company has not received any such demands from the lenders and the management is in the process of obtaining waivers from the lenders.

CAR's share price closed 10 percent higher at 2.31 Hong Kong dollars (0.3 U.S. dollars) on Wednesday.

Lu, born in 1969 in a village in east China's Fujian Province, is known for founding car rental service company CAR. He is also chairman of coffee chain Luckin Coffee Inc, which got listed in Nasdaq in May 2019.

Luckin, a major rival to Starbucks in China, grabbed the media spotlight in April as it admitted to fabricated transactions in 2019 with about 2.2 billion yuan (310 million U.S. dollars) worth of inflated sales. The Nasdaq notified the company on May 15 to delist but Luckin resumed share trading on May 20. 

China's market regulator and the Ministry of Finance have found evidence that Luckin paid taxes on bogus transactions and Lu may face criminal charges in China, Caixin reported on Saturday, citing an anonymous source close to the matter.