Under the revised Securities Law of China, regulators may have some ability to investigate Luckin, which disclosed wide-scale sales revenue fraud.
If the deal proceeds, Luckin founder Charles Lu and his family will receive up to HK$1.37 billion, likely to be put toward the company’s cash crunch.
Lawyer of these Luckin investors said it is the first time investors have tried to hold a company accountable in China for fraud perpetrated on US markets.
Luckin’s impending implosion has led to a lot of soul-searching with many questioning the environment that allowed Luckin to thrive.
After Luckin Coffee’s spectacular admission of fraud, more Chinese companies are finding themselves in the crosshairs of regulators and short sellers.