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Luckin Coffee’s Troubles May Just Be Getting Started After Revealing Financial Investigation

From: forbes.com

Luckin Coffee, a fast-growing coffee chain aiming to overtake Starbucks in China, could be forced to restructure or downsize after the company revealed that its staff were fabricating sales in 2019.

Shares of the Nasdaq-listed firm collapsed 76% after the board announced in a Thursday stock exchange filing that it had formed a special committee to investigate Chief Operating Officer Liu Jian and several employees who reported to him. They’re accused of financial misconduct, including fabricating sales involving a total of 2.2 billion yuan ($310 million), from the second quarter of last year to the fourth quarter.

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