Provide your email for confirmation

Tell us a bit about yourself

country *

Please provide your email address

welcome to Rappler

Login

To share your thoughts

Don't have an account?

Login with email

Check your inbox

We just sent a link to your inbox. Click the link to continue signing in. Can’t find it? Check your spam & junk mail.

Didn't get a link?

Sign up

Ready to get started

Already have an account?

Sign up with email

By signing up you agree to Rappler’s Terms and Conditions and Privacy

Check your inbox

We just sent a link to your inbox. Click the link to continue registering. Can’t find it? Check your spam & junk mail.

Didn't get a link?

Join Rappler+

How often would you like to pay?

Annual Subscription

Monthly Subscription

Your payment was interrupted

Exiting the registration flow at this point will mean you will loose your progress

Your payment didn’t go through

Exiting the registration flow at this point will mean you will loose your progress

welcome to Rappler+

Luckin Coffee, associated firms fined $9 million over scandal

Embattled Chinese chain Luckin Coffee is among a raft of 45 companies hit with a combined fine of nearly $9 million over a scandal involving false sales figures, China's market regulator said on Tuesday, September 22.

Luckin – Starbucks' rival in China – had boosted transactions last year through fake coupons by 2.25 billion yuan ($330 million) and inflated its revenue by some 2.12 billion yuan, according to an earlier probe by the finance ministry.

The scandal led to the company being delisted from New York's Nasdaq and the removal of top executives.

On Tuesday, China's State Administration for Market Regulation said investigations found that Luckin, with the help of other companies, had falsely increased its 2019 sales revenue, costs, and profit margins, and imposed a combined fine of 61 million yuan.

The coffee chain launched in 2017 and aimed to dethrone Starbucks in China via an aggressive growth strategy, enticing customers with an app-based purchasing model that prioritized takeaway and delivery options, as well as generous mobile coupons. 

But its shares went into freefall after the company revealed in April that a top executive had cooked the books.

From August last year to April, it also used false marketing data to "deceive and mislead the public," going against Chinese unfair competition laws, the market regulator said on Tuesday.

More than 40 third-party companies, including Beijing Auto World Consulting Service and Beijing Shenzhou Youtong Technology Development, were found to have given "substantive assistance" for the false advertising.

Luckin said on Tuesday that it "respects and will resolutely implement" the decision after the investigation.

It also said it had carried out "comprehensive rectification" on the relevant issues, adding that it will regulate business activities in line with laws and regulations to ensure stable operations. – Rappler.com