FOOD & BEVERAGE

China fines Luckin Coffee and linked firms a total of $9mLuckin says it respects the regulator's decision

Women leave a store of the Chinese coffee house chain Luckin Coffee in Beijing. © Reuters

September 22, 2020 13:22 JST

BEIJING (Reuters) -- China's markets regulator said on Tuesday it has fined a group of 45firms, including Luckin Coffee, a combined 61 million yuan ($8.98 million) for acts linked toLuckin's falsification of financial records and misleading of the public.

China's finance ministry said earlier this year that Luckin booked 2.25 billion yuan of salesthrough fake coupons from April 2019 to end of 2019. The ministry's investigation also foundthat Luckin inflated other figures including its revenue, costs and profit in that same period.

The market regulator said a probe it launched in April found that Luckin violated Chineselaws on inappropriate competition by inflating its operational data, and also misled thepublic with faked statistics between August 2019 and April this year.

A total of 43 companies were fined for helping Luckin in these activities. Two Luckin entitieswere involved.

Luckin responded on its Weibo account on Tuesday that it respected the regulator's decision.

https://asia.nikkei.com/Business/Food-Beverage

"We have carried out an overall rectification on the related issues," the company said: "Wewill further improve our operations according to related laws and regulations."

Luckin had positioned itself in China as a local and ambitious challenger to U.S. coffee chainStarbucks Corp . Luckin delisted from Nasdaq at the end of June after admitting toaccounting fraud.

The company wound up an internal probe in July that found its revenue was inflated byaround 2.12 billion yuan in 2019. During the investigation, Luckin sacked its CEO and COO.