Washington, Dec 17:China’s Luckin Coffee has agreed to pay a USD 180 million penalty to settle accounting fraud charges, the Securities and Exchange Commission says.
The SEC charged the company with defrauding investors by misstating its revenue, expenses, and net operating loss to appear to have been more profitable and growing faster than it actually was, and to meet the company’s earnings estimates.
The Chinese rival to Starbucks fabricated more than USD 300 million in retail sales, the SEC said in a statement. It said the misconduct continued from April 2019 until January 2020.
Luckin’s shares traded on the NASDAQ until July 13, 2020. They now trade on the OTC Pink board, or Pink Open Market, the most speculative tier for trading of over-the-counter stocks.