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Luckin, China’s Starbucks Rival, Plunges on Accounting Probe

  • Board members suspend chief operating officer after misconduct
  • Company says fabricated sales appear to total 2.2 billion yuan
A customer exits a Luckin Coffee outlet in Beijing.

A customer exits a Luckin Coffee outlet in Beijing.

Photographer: Gilles Sabrie/Bloomberg
Updated on

Luckin Coffee Inc., the fast-growing Chinese coffee chain, plunged as much as 81% on Thursday after the company said its board is investigating reports that senior executives and employees fabricated transactions.

The company’s announcement that Chief Operating Officer Jian Liu and employees reporting to him engaged in misconduct casts doubt on the foundations of the Chinese coffee chain’s meteoric rise and its emergence as a key competitor to Starbucks Corp.