The astounding fraud admission from beverage chain Luckin has put more US-listed Chinese companies in regulator and short-seller crosshairs.
While the CEO and COO take the fall, Luckin non-executive chairman and driving force behind CAR Inc., Lu Zhengyao, remains unscathed.
China’s regulators have been cracking down on companies like that violate personal privacy and over-collect consumers’ personal data.
China’s Beijing Automotive Group (BAIC) is seeking to buy a stake of up to 21.26% in Car Inc, a Hong Kong-listed car rental company formed by Luckin Coffee chairman Charles Lu.
Luckin Tea will launch a separate app and a mini-program focused on lower-tier cities.
Shares slid overnight after losses hit nearly $100 million in the quarter.
Users can locate the nearest coffee machine and place an order through the Luckin app.
Luckin Coffee and Tencent have been partners since Sept. 2018.
The company is currently worth $2.2 billion following a $200 million round of funding in December.
Luckin is under financial pressures as the startup coffee chain is showing signs of overheating.