Luckin confirms sales fraud, two months after doubts about the disclosure accuracy by the Chinese Starbucks rival.
While the CEO and COO take the fall, Luckin non-executive chairman and driving force behind CAR Inc., Lu Zhengyao, remains unscathed.
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.
Michael, and the hosts, have been bearish on Luckin for quite some time.
Luckin responded Monday to fraud allegations from an anonymous report publicized by short seller Muddy Waters on Friday.
Chinese-style noodle chain restaurants first became tech investor darlings in 2021 when the industry faced tightened regulation.
Luckin’s impending implosion has led to a lot of soul-searching with many questioning the environment that allowed Luckin to thrive.
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.