[Asia Economy Reporter Hyunwoo Lee] The Nasdaq Stock Exchange has notified Luckin Coffee, known as the "Chinese Starbucks," of its delisting from the Nasdaq market due to public harm caused by accounting fraud. Luckin Coffee has requested a hearing from Nasdaq, so the delisting is not expected to begin immediately.
According to foreign media such as CNBC, on the 19th (local time), Nasdaq sent a letter notifying Luckin Coffee of its delisting. In the letter, Nasdaq stated, "This decision was made due to public concerns arising from Luckin Coffee's accounting fraud and previous failures to properly disclose information." As a result, Luckin Coffee faces the risk of delisting just one year after its Nasdaq listing in May last year.
Luckin Coffee announced that it plans to request a hearing from Nasdaq and explained that the listing will be maintained until the results are announced. Hearings at Nasdaq are held within 30 to 45 days after a listed company’s request. Earlier, on the 2nd of last month, it was confirmed that Luckin Coffee had committed accounting fraud by inflating sales figures by 2.2 billion yuan (approximately 378.6 billion KRW) from the second to the fourth quarter of last year, and trading has since been suspended. Chinese authorities also took a tough stance by raiding Luckin Coffee’s headquarters at the end of last month.
Since its founding in October 2017, Luckin Coffee rapidly grew to operate over 4,500 stores in China, earning it the nickname "Chinese Starbucks." After its Nasdaq listing last year, it raised $651 million (approximately 797.8 billion KRW) through its initial public offering (IPO).
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