Thursday, November 26, 2020
Home WOLRD Rest of World Luckin Coffee fraud has big implications for Chinese issuers | fraud, muddy...

Luckin Coffee fraud has big implications for Chinese issuers | fraud, muddy waters, adrs | FinanceAsia

Luckin Coffee’s share price dropped more than 80% at the beginning of April 2020 after the company issued findings from an internal investigation uncovering Rmb2.2 billion $311 million in fabricated sales from the second to the final quarter last year.

The spectacular fallout of a Chinese company that had recently been valued at $4billion will have wider and long-term ramifications, experts claim.

“One rotten apple is ruining a whole barrel,” Haitong’s analyst wrote in a briefing to investors. “All the Chinese companies listed in the US will likely suffer collateral damage.” As one of Luckin Coffee’s four IPO underwriters, Haitong initiated an internal investigation into the matter,…

¬ Haymarket Media Limited. All rights reserved.


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