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China's Luckin Coffee committed fraud; to pay $180 million in fines.

Luckin Coffee admitted to fabricating more than $300 million in sales between April 2019 to January 2020


China's Luckin Coffee committed fraud; to pay $180 million in fines. | BEAMSTART News

China's Luckin Coffee, the controversial "Starbucks Challenger" startup that committed financial fraud, has agreed to pay $180 million in settlements with the U.S. Securities and Exchange Commission.

The startup, which went public on NASDAQ back in 2019, was one of the fastest companies to achieve IPO status since its founding in 2017.

Luckin Coffee's IPO at NASDAQ.

The following year the company went public, a report by Muddy Waters surfaced, accusing Luckin Coffee for overstating its revenues, expenses, and losses by the hundreds of millions of dollars.

Upon an internal investigation by the company, Luckin admitted that the accusations were true, and that the company fabricated more than $300 million in sales between April 2019 to January 2020 by “creating a fake operations database, and altering accounting and bank records to reflect the false sales”.

The company's shares were delisted from NASDAQ trading in June this year after its shares plunged fell by 50% when news of fraud surfaced.

ABOUT THE AUTHOR

Alfred Lee

Journalist at BEAMSTART. I write about breaking business news in the region.

Based in Malaysia

Works at BEAMSTART

ALSO MENTIONED IN THIS POST

Luckin Coffee

Fast-growing coffee chain across China

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