Nasdaq notifies China’s Luckin Coffee of plans to delist it from US bourse

FILE PHOTO: A cup of 'Luckin Coffee' coffee is poured during the company's IPO at the Nasdaq Market site in New York, U.S., May 17, 2019. REUTERS/Brendan McDermid/File Photo

Luckin Coffee Inc said on Tuesday that Nasdaq Inc has notified it of plans to delist it from the U.S. stock exchange, a month after the Chinese coffee chain disclosed that some employees fabricated sales accounts.

Nasdaq has renewed its focus on auditing standards. This week it tightened listings rules, hoping to curb initial public offerings (IPOs) of Chinese companies closely held by insiders and opaque about accounting, Reuters reported on Monday.

Luckin said in early April that as much as 2.2 billion yuan ($310 million) in sales last year were fabricated by its chief operating officer Jian Liu and other staff, who had been suspended while the company carried out its investigation.

The falsified numbers equate to about 40% of Luckin’s annual sales projected by analysts, according to Refinitiv IBES data.

In its delisting notice, Nasdaq cited public interest concerns raised by the fabricated transactions and Luckin’s failure to disclose material information, the company said, confirming an earlier Reuters report.

Luckin plans to challenge the move before a Nasdaq hearing panel, and will remain listed until the outcome, most likely within two months, the company added.

Founded in June 2017, Luckin, a rival to Starbucks in China, had one of the most successful U.S. IPOs by a Chinese company last year.

Luckin disclosed on May 12 that it had fired its chief executive officer, Jenny Zhiya Qian, who had led the company since November 2017, and Liu, who became COO in May 2018.

Shares of the Xiamen-headquartered company slumped more than 80% on April 2, the day the probe was revealed. Trading was halted on April 7. Pending an outcome on the delisting, Nasdaq said it would allow the shares to resume trading on May 20.

Luckin has said it has been cooperating with and responding to inquiries from regulators in the United States and China.

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.