Luckin Coffee has agreed to pay a $180 million penalty to settle accounting fraud charges brought by the US market regulator.
Chinese beverage chain Luckin Coffee replaced founder and former chairman Charles Lu with its acting CEO, Guo Jinyi.
Luckin apologized to its employees for the upheaval following its fraud admission in early April, and on the same day removed its CEO and COO.
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.
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.
Luckin responded Monday to fraud allegations from an anonymous report publicized by short seller Muddy Waters on Friday.
Naixue’s Tea, one of China’s largest tea beverage chains, is reportedly looking to raise $400 million in a US IPO as early as this year.
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.
Heytea started out in southern China’s Guangdong province in 2012 and later expanded to most tier-one and tier-two cities in China.