Luckin responded Monday to fraud allegations from an anonymous report publicized by short seller Muddy Waters on Friday.
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 looks to fund its aggressive growth tactics including a vending machine initiative, and expansion into other consumables and overseas markets.
The CEO, COO, and many other employees of China coffee chain Luckin Coffee have been fired after the company admitted to accounting fraud in April.
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.
Information asymmetries between tech-focused Chinese companies and US investors makes it easy for dishonest managers to lie to investors.
‘If there’s anything to be learned about Luckin Coffee, it’s that there’s always more than meets the eye.’ Luckin skeptic Michael Norris has more questions.
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.
Wei Sheng joins to discuss a recent lawsuit filed against Luckin Coffee in China, and how regulators are cracking down on the company since their admission of fraud.