Luckin Coffee has agreed to pay a $180 million penalty to settle accounting fraud charges brought by the US market regulator.
Luckin is being investigated in the US for defrauding investors amid pressing concerns to recoup a dropoff in sales as a result of Covid-19.
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.
The default followed almost immediately after Luckin disclosed that its head of operations had fabricated billions of RMB worth of sales for most of 2019.
Luckin responded Monday to fraud allegations from an anonymous report publicized by short seller Muddy Waters on Friday.