Bad coffee

Luckin Coffee fraud has big implications for Chinese issuers

A stricter review process and waning investor interests are the new realities Chinese companies confront when listing in New York. Improvements in the methods of conducting due diligence and enhanced safeguards for investors are sorely required.

Luckin Coffee’s share price dropped more than 80% at the beginning of April 2020 after the company issued findings from an internal investigation uncovering Rmb2.2 billion $311 million) in fabricated sales from the second to the final quarter last year.

¬ Haymarket Media Limited. All rights reserved.

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