Which Chinese coffee chain admitted to fabricating sales in 2020?

Luckin Coffee admitted in 2020 that sales had been fabricated, making it the Chinese coffee chain at the center of the scandal.

The company disclosed on April 2, 2020, that its chief operating officer, Jian Liu, had fabricated roughly 2.2 billion yuan (about $310 million) in 2019 sales. The admission followed an anonymous investigative report by short seller Muddy Waters Research, which alleged that Luckin had inflated operating figures.

The scandal sharply damaged Luckin’s reputation and share price. Trading in its Nasdaq-listed shares was halted, the company was delisted, and the U.S. Securities and Exchange Commission later announced a $180 million settlement. Luckin also entered bankruptcy-related restructuring proceedings in 2021.

A common mix-up is confusing Luckin Coffee’s accounting fraud with ordinary business losses or with scandals involving multinational coffee brands such as Starbucks and Costa Coffee. Luckin continued operating and later rebuilt its business, so the scandal did not permanently eliminate the brand.