NEW YORK: US securities regulators fined China’s Luckin Coffee $180 million for defrauding investors over its financial performance, officials announced Wednesday.
The embattled chain, once seen as a potential rival to Starbucks in China, intentionally fabricated more than $300 million in retail sales in order to “falsely appear to achieve rapid growth,” according to allegations from the US Securities and Exchange Commission (SEC).
The alleged scam was overseen by executives and senior managers who “created a fake operations database and altered bank records to hide their misconduct from the company’s finance department and others,” the SEC complaint said. The company raised more than $864 million from debt and equity investors during the alleged fraud from April 2019 and January 2020, said the SEC, which described the investigation as “continuing.”
Luckin Chief Executive Jinyi Juo said the settlement “reflects our cooperation and remediation efforts, and enables the company to continue with the execution of its business strategy,” according to a company press release.—AFP
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