Luckin

China’s Luckin Coffee to pay $180 million penalty to settle fraud case

3 months ago

People wearing face masks walk by a Luckin Coffee store on June 29, 2020 in Yichang, Hubei Province of China.

Liu Junfeng | VCG | Getty Images

Luckin Coffee has agreed to pay a $180 million penalty to settle accounting fraud charges for “intentionally and materially” overstating its 2019 revenue and understating a net loss, U.S. regulators said on Wednesday.

The U.S. Securities and Commission (SEC) fine on the China-based rival to Starbucks comes after it said earlier this year that much of its 2019 sales were fabricated, sending its shares plunging and sparking an investigation by China’s securities regulator and the SEC.

The SEC said it found that Luckin “intentionally and materially overstated its reported revenue and expenses and materially understated its net loss in its publicly disclosed financial statements in 2019.”

Luckin has not admitted or denied the charges, the SEC said. The company has agreed to pay

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Luckin Coffee asked to reverse boardroom changes after co-founder’s ouster, as China prepares to wield big stick for accounting fraud

7 months ago

Luckin Coffee, the coffee chain dubbed as China’s Starbucks, has been asked by some shareholders to reverse some of its boardroom changes in July following the ouster of its co-founder and chairman, as Chinese regulators prepare to clamp down on accounting fraud.

Hong Kong-based Centurium Capital is seeking to reinstate Sean Shao as a director and remove Jie Yang and Ying Zhen as independent directors, the company said in US exchange filings on Monday. These would undo the changes that took place at a shareholders’ meeting on July 5.

The two independent directors, however, have resigned from the board with immediate effect, Luckin said in a separate filing. The duo were both reported by local Chinese media to be the nominees Haode Investment, the family trust of co-founder Charles Lu Zhengyao. Lu was separately removed as chairman at a board meeting on July 12.

Luckin has called for an

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China says to penalise Luckin Coffee for accounting fraud

7 months ago

BEIJING (Reuters) – Chinese regulators said they would penalise Luckin Coffee after confirming accounting fraud that has already forced the company to delist from the U.S. Nasdaq exchange.

The Ministry of Finance, which began an investigation into Luckin Coffee (China) and Luckin Coffee (Beijing) in early May, found Luckin booked 2.25 billion yuan ($322.60 million) of sales through fake coupons from April 2019 to the end of last year, it said in a statement on its website on Friday.

It also found Luckin inflated sales by 2.12 billion yuan during the period, while costs were inflated by 1.2 billion yuan and profits by 908 million yuan.

The ministry said that it would now impose administrative penalties on Luckin, without giving further details.

The State Administration for Market Regulation said in a separate statement, again without giving details, that it too would take action against the two domestic entities of Luckin

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