Product details

Considered one of the fastest-growing coffee chains in China because of its impressive business strategy, Luckin Coffee Inc (Luckin) was nicknamed 'China's Starbucks'. Starting from a single trial shop in 2017, the company established 2,370 stores within 18 months and, by May of 2019, courtesy of its impressive commercial progress, the company's shares were listed on the NASDAQ stock exchange. However, less than a year after its listing, in April of 2020, Luckin was severely hit by rumours of accounting fraud. An internal investigation of the company, launched in response to the claims, revealed that the Chief Operating Officer of Luckin and many employees, who reported to him, were engaged in accounting misconduct which sent its share prices plummeting by nearly 76% on April 2nd, 2020, eliminating billions of dollars of shareholders' wealth in the process along with mutual, pension and hedge funds. To revive growth, subsequent to the outbreak of the COVID-19 pandemic in 2020, Luckin registered steady revenues for various quarters in 2020, but the question remained: Who should be blamed for the accounting fraud at Luckin? Was the COO the only one responsible, or did the top management, internal and external auditors, or market regulators play equal parts in the catastrophic collapse of China's Starbucks?