Luckin Coffee’s fake-transactions scandal could lead the Chinese chain to lose its spot on the Nasdaq Stock Market.
Luckin Coffee Inc. announced that on May 15, 2020, the company received a written notice from the Listing Qualifications Staff of The Nasdaq Stock Market LLC, indicating that it has determined to delist the company’s securities from Nasdaq.
Nasdaq commented on “public interest concerns” raised by Luckin’s fabricated transactions that the company admitted last month. It also commented on the company’s failure to disclose “material information,” mentioning the fabricated transactions.
Luckin Coffee said that the company plans to request a hearing on this matter. The chairman of Luckin Coffee apologised over its US$310 million accounting fraud. Delisting is a problem for companies, as it makes trading of stock more difficult.
Trading in Luckin stock has been stopped since early April, will resume trading on May 20 on Nasdaq, after Luckin Coffee said it would appeal.