April 29, 2020 / 10:20 AM / a month ago

U.S. SEC investigates Luckin Coffee over accounting scandal- WSJ

April 29 (Reuters) - The U.S. Securities and Exchange Commission is investigating Luckin Coffee Inc for fabricating millions of dollars worth of sales deals last year, the Wall Street Journal reported on.wsj.com/3eYO4Kx on Wednesday citing people familiar with the matter.

Earlier this month, Luckin Coffee said an internal investigation revealed that its chief operating officer and other employees were suspended for fabricated sales deals worth about 2.2 billion yuan ($310.77 million).

Shares in Luckin, which aggressively pitched itself as a challenger to Starbucks in China, have plunged by more than 90% from their January high following the news.

China’s State Administration for Market Regulation has also launched an inspection into Luckin, joining the country’s securities watchdog.

Luckin and the U.S. SEC were not immediately available for a comment. (Reporting by Nivedita Balu in Bengaluru Editing by Supriya Kurane)

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