Luckin Coffee

About Luckin Coffee

Luckin Coffee was revealed to have fabricated 310 million in sales in April 2020. The Chinese coffee chain had been listed on NASDAQ and was valued at 12 billion. Muddy Waters published an 89 page report based on field research at Luckin stores showing that the company was overstating sales. Luckin initially denied the allegations but later admitted to fabricated transactions. NASDAQ delisted Luckin in June 2020. The company paid 180 million to settle SEC fraud charges. Chairman Lu Zhengyao and CEO Qian Zhiya were removed. Luckin continued operating in China and eventually restructured. The company relisted on the US market via pink sheets. The Luckin case raised questions about the reliability of financial reporting from Chinese companies listed on US exchanges and contributed to the Holding Foreign Companies Accountable Act.