Chinese rival to Starbucks reached agreement with the US Securities and Exchange Commission
Chinese coffee chain Luckin Coffee has agreed to pay USD 180 million fine to settle accounting fraud claims after allegedly overstating its expenses, revenues and losses by hundreds of millions of dollars.
As stated by the US Securities and Exchange Commission (SEC), Luckin Coffee intentionally faked more than USD 300 million in sales between April 2019 and January 2020, where it overstated its reported revenue and expenses, whilst understated its net loss. Investigation revealed that a Chinese startup was creating a database of fake transactions to look more profitable.
According to the SEC, Luckin neither admitted nor denied the accounting fraud allegations. Nevertheless, the company was delisted by Nasdaq by the end of June 2020.
Currently, the Chinese coffee chain remains to operate as usual.