Chinese coffee company Luckin will be delisted after defrauding investors

Chinese coffee company Luckin will be delisted after defrauding investors

China's Luckin Coffee (LK) had hopes of being as successful with American investors as its rival Starbucks. But following an accounting scandal, Luckin is now heading to Wall Street's graveyard.To get more news about luckin coffee stock price, you can visit shine news official website. Luckin announced Friday that it was giving up plans to appeal the Nasdaq exchange's decision to delist the stock. Shares of Luckin, which fired its CEO and chief operating officer in May after it was discovered that the company fraudulently inflated sales, plunged more than 50% to about $1.40. The company initially said last month that it was requesting a hearing with Nasdaq but it said in a press release Friday that shares will now be suspended from trading at the start of Monday June 29. Luckin, founded in 2017, went public last year and surged due to what -- at the time -- appeared to be strong sales growth. Investors lapped up the stock, betting that Luckin would become a legitimate homegrown rival to Starbucks (SBUX), which generates a big chunk of its revenue from Chinese consumers. It's not clear what's next for Luckin now that it will no longer have access to the stock market to raise new capital. As of late last year the company had 3,680 stores. However, bankruptcy rumors have been swirling in light of the scandal.

Luckin Coffee Inc Chairman Charles Zhengyao Lu has been ousted by shareholders from the embattled coffee chain, just days after a proposal to remove him failed to get board approval, Bloomberg News reported on Sunday.

Three other board directors including Sean Shao were also removed at an extraordinary shareholders meeting in Beijing on Sunday, the report said.Luckin stated just days ago that a proposal to remove Lu as chairman of the embattled coffee chain’s board did not get the number of necessary votes from directors to pass.The China-based coffee chain had earlier in the week wound up an internal probe into fake annual sales of about $300 million, following which several of Luckin's directors proposed the ousting of Lu.Lu, who is the controlling shareholder of Luckin, is also the founder of auto-rental firm CAR Inc and Chinese ride-hailing firm Ucar Inc.

During the investigation, Luckin sacked its chief executive and chief operating officers, who had previously held top positions at Lu’s other firms.