China’s Luckin Coffee Inc., said it has been informed by the Nasdaq that it must delist from the exchange.
The order is coming a month after the Chinese coffee chain disclosed that some of its employees fabricated sales accounts. Earlier today, we also reported that Nasdaq is working a new listing rule that will make it difficult for Chinese companies to list on the exchange.
It would be recalled that 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 publicly 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 this delivers an outcome, most likely in the next two months, the company added.