China’s Luckin Coffee says business to continue amid financial fraud investigation


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China’s Luckin Coffee says business to continue amid financial fraud investigation

On Sunday, the 5th of April 2020, Luckin Coffee, the Xiamen-based Chinese coffee house chain startup founded less than three years ago, but exceeded the number of the world’s largest coffee house operator Starbucks' outlets in China having had stores in 3,680 locations, had issued a statement saying that it would continue its normal operation amid an internal investigation on potential financial fraud and apologized to its stakeholders and public for the inconvenience.

As a matter of fact, latest announcement from the Luckin Coffee, which was incorporated in Beijing back in the 2017s, came forth days after the Chinese coffee house chain operator had announced that an internal investigation had found the company COO (Chef Operating Officer) and other employees were linked to a number of fabricated sales deal.

On top of that, NYSE-listed stocks of Luckin Coffee had shed more than four-fifth of its market cap on Thursday (April 2nd) followed by the release of a statement that the company’s internal investigation had found a sum of roughly $310 million in fabricated sales between Q2, 2019 and Q4, 2019.

Meanwhile, as some of the sources were quoted saying that the banks which were involved in a successful NYSE IPO of the Chinese company last year had been reviewing their works, apologizing to the public, Luckin Coffee said in a post in its official Weibo account on Sunday (April 5th), “Regarding the suspected financial fraud and the extremely bad impact it has caused, Luckin Coffee hereby sincerely apologizes to the public. ”