Luckin Coffee: Fined 18.6 billion yen for fraudulent accounting: Settled with US SEC
SEC:
The SEC announced on the night of December 16th, US time.
Luckin’s Fraud Accounting:
Luckin’s fraudulent accounting was first pointed out by US investment firm Muddy Waters in early 2020.
In April, Luckin said he would launch an internal investigation into the allegations.
In June, the SEC said it would consider delisting Luckin.
In July, Luckin allowed window dressing.
Luckin’s business:
Despite the fraudulent scandal, Luckin’s business is still operating normally.
The company and its stores are now “stable and normal,” he said in a statement on December 17.
TechCrunch Japan
https://jp.techcrunch.com/2020/12/18/2020-12-16-luckin-180-million-fine-sec/
SEC.gov | Luckin Coffee Agrees to Pay $180 Million Penalty to Settle Accounting Fraud Charges
FOR IMMEDIATE RELEASE 2020-319 Washington D.C.,
Dec. 16, 2020 —
The Securities and Exchange Commission
today charged China-based company Luckin Coffee Inc. with defrauding investors by materially misstating
the company’s revenue, expenses, and net operating loss in an effort to falsely appear to achieve rapid growth and increased profitability and to meet the company’s earnings estimates.
Luckin,
whose American Depositary Shares traded on Nasdaq until July 13, 2020, has agreed to pay a $180 million penalty to resolve the charges.
The SEC’s complaint alleges that, from at least April 2019 through January 2020,
Luckin intentionally fabricated more than $300 million in retail sales by using related parties to create false sales transactions through three separate purchasing schemes.
According to the complaint,
certain Luckin employees
attempted to conceal the fraud by inflating the company’s expenses by more than $190 million, creating a fake operations database, and altering accounting and bank records to reflect the false sales.