Luckin Coffee, the Chinese coffee shop chain accused of fraud by short-seller report published by Muddy Waters Research, announced on Tuesday night Beijing time that it received a delisting notice from Nasdaq.
In a statement to investors, Luckin said that Nasdaq's Listing Qualifications department has determined to delist the company's securities based on public interest concerns raised by fabricated transactions, pursuant to Nasdaq Listing Rule 5101, and the company's past failure to publicly disclose material information, pursuant to Listing Rule 5250.
An internal investigation led by three independent board members found that the company, under the command of its now-resigned COO Liu Jian, fabricated about 2.2 billion RMB, or about 310 million dollars worth of transactions. Fake amount accounted for nearly half of the total transactions volume over the same period, according to a previous PingWest report in Chinese.
The company said in the statement that it plans to request a hearing before Nasdaq and remain listed on the stock market pending the outcome of the hearing.