(Yicai Global) Nov. 11 -- Asian private equity firm MBK Partners has agreed to purchase a majority stake in CAR Inc., allowing China’s largest car leasing firm to finally cut ties with its biggest investor UCAR which has been tainted by a sister company’s fraud scandal, badly affecting the firm’s stock price.

Indigo Glamour, a unit of MBK, will pay HKD1.8 billion (USD228 million) for a 20.86 percent stake priced at HKD4 (USD0.52) a share. Once complete, UCAR will no longer hold any equity in CAR, the Beijing-based car rental firm said yesterday.

CAR has been desperately trying to distance itself from UCAR, which shares a chairman with scandal-hit coffeehouse chain Luckin Coffee. When the Xiamen, southeastern Fujian-based company confessed in April that its chief operations officer had tacked CNY2.2 billion (USD333 million) onto its 2019 sales figure, CAR’s shares plummeted by half in a single day.

MBK is the fourth company to sign an equity purchase agreement in the last six months, two of which have already pulled out. Beijing-based automaker BAIC Group has reneged on a previous deal to invest HKD1.4 billion, CAR said yesterday. Shanghai-based SAIC Motor also got cold feet. New York-based private equity firm Warburg Pincus is the only firm to have gone ahead so far, purchasing a 4.65 percent stake at HKD2.30 apiece.

The buy-in by MBK, which has more than USD22 billion assets under management primarily in China, Japan and South Korea, has failed to cheer up investors. CAR’s share price [HKG:0699] fell over 9 percent during the day today and was trading down 3.1 percent at HKD3.13 (USD0.40) as of 3 p.m. China time.

Chairman Lu Zhengyao was ousted from the board of Luckin Coffee in July as the coffee chain tries to clean the slate and distance new management from its massive fraud scandal.

Editor: Kim Taylor