Luckin chairman Charles Lu Zhengyao expressed «deep pain and guilt» after the Chinese counterpart to Starbucks was set to be delisted over $310 million in accounting fraud.
Lu posted the statement via social media platform WeChat adding that he never intended to defraud investors and only wanted to build good businesses with social value. He also noted that almost all his wealth including share-backed loans were channeled into supporting his companies and that he had never used company funds for personal pleasure.
The Xiamen-based startup said it would appeal to Nasdaq’s delisting decision.
Poor Accounting
The Luckin scandal has unveiled risks and concerns about the accounting standards of Chinese firms listed in the U.S. This has driven U.S. authorities to reconsider Chinese access to American funding and Nasdaq is reportedly set to tighten listing standards that target the country.
Since the scandal surfaced in early may, Luckin shares have plummeted more than 80 percent with senior staff casualties including the exit of chief operating officer Liu Jian and chief executive Jenny Qian alongside six other employees who were involved or had knowledge of the alleged fraud and were subsequently suspended.
