HONG KONG—Charles Lu, the co-founder and former chairman of Luckin Coffee has lost control of all his shares in the Chinese coffee chain following a recent court ruling, according to people familiar with the matter.

A court in the British Virgin Islands granted on 9 July an application by banks to wind up Haode Investments, an entity controlled by Lu’s family trust that holds Luckin shares, and appointed KPMG as the liquidator of the assets, according to the people.