US regulators have hit Luckin Coffee with a $180 million penalty after finding that the scandal-plagued Chinese chain altered bank records and set up a fake database as part of an effort to fabricate its accounts, reported the Financial Times.
The Securities and Exchange Commission on Wednesday charged the company with defrauding investors by materially misstating revenue and expenses, inflating its growth rates and understating its losses.
Luckin agreed to the settlement, which is subject to court approval, without admitting or denying the allegations, said the FT.
Once touted as China’s rival to Starbucks, Luckin listed in New York last year and initially impressed, but shocked Wall Street in April when it said hundreds of millions of dollars of sales had been fabricated. The stock was subsequently delisted from the Nasdaq exchange and shareholders ousted its founder, Charles Zhengyao Lu.