Chinese securities regulator condemns Luckin coffee for accounting fraud

2020-04-03 17:01:33Xinhua Editor : Li Yan ECNS App Download

Chinese securities regulator said Friday that it pays close attention to and strongly condemns the accounting fraud by Luckin Coffee Inc., a coffee chain retailer.

A listed company, no matter where it is listed, shall strictly abide by the laws and norms of the relevant market and perform its obligation of information disclosure truthfully, accurately and completely, the China Securities Regulatory Commission (CSRC) said in an online statement.

The CSRC will, in accordance with the laws and relevant arrangements for international securities regulatory cooperation, resolutely crack down on securities fraud and effectively protect the rights and interests of investors, said the statement.

Luckin Coffee, domiciled in the Cayman Islands, registered to issue shares via an overseas regulator and listed on the Nasdaq Stock Market in May 2019, said the CRSC.

Starting in the second quarter of 2019, the company's chief operating officer and several employees engaged in certain misconduct, including fabricating certain transactions, Luckin Coffee announced Thursday, citing an internal investigation.

The aggregate sales associated with the fabricated transactions from Q2 to Q4 of 2019 amount to around 2.2 billion yuan (about 310 million U.S. dollars), according to the corporate announcement.

Shares of Luckin Coffee shed 75.57 percent to close at 6.4 dollars apiece on Thursday.

The Xiamen-based company, founded in 2017, had operated about 4,500 stores in more than 40 cities across China by the end of 2019.


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