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Nasdaq informs China's Luckin Coffee it plans to delist it

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05/19/2020 | 03:13 pm

Nasdaq has delivered a notice to Luckin Coffee, informing the Chinese chain that it has to delist from the U.S. stock exchange.

It comes just a month after the company, a rival to Starbucks in China, disclosed that its chief operating officer and other staff fabricated sales to the tune of 2.2 billion yuan or $310 million.

That day, its shares plunged more than 80%. Trading was halted the following week.

Luckin, which acknowledged the delisting on Tuesday in a regulatory filing, plans to challenge the move before a Nasdaq hearing panel, and will remain listed until this delivers an outcome.

The move underscores Nasdaq's renewed focus on the auditing standards of companies on its exchange.

Citing sources, a Reuters report this week revealed the exchange is set to unveil new restrictions on initial public offerings in a move that will make it harder for some Chinese companies to debut on its stock exchange.

Sources say the changes are largely being driven by concerns about the lack of accounting transparency of some Chinese IPO hopefuls.

At a time of escalating tensions between the United States and China, Nasdaq's new curbs represent the latest flashpoint between the world's two largest economies.

© Thomson Reuters 2020
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