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China's Luckin Coffee Scandal Renews US Call for Stricter Oversight

Fang Bing

   Luckin Coffee Inc., a Chinese coffee retail chain listed on the Nasdaq,
   confirmed this week it has received notice that it will be delisted
   from the U.S. stock exchange after it acknowledged falsifying $310
   million in sales.

   Analysts say the action is a blow to all Chinese companies, and comes
   as U.S. lawmakers consider imposing new regulations on Chinese
   companies seeking American investment.

   [1]Luckin, an upstart rival to Starbucks Corp. in China, said in a
   regulatory filing on Tuesday that it has received written notice from
   Nasdaq's listing qualification staff on May 15 that it would be
   dropped. The company said the delisting decision was due to "public
   interest concerns" surrounding "fabricated" transactions, as well as
   "past failure to disclose material information."

   The China-based company said that it planned to request a hearing
   before a Nasdaq panel to appeal the decision -- a meeting that would
   occur roughly 30 to 45 days after the request.

References

   1. https://www.sec.gov/Archives/edgar/data/1767582/000110465920063497/0001104659-20-063497-index.htm