Luckin Coffee, the upstart coffee chain once touted as a rival to Starbucks in China, is being delisted by the Nasdaq stock exchange. The three-year-old company, which raced to open 6,500 stores across China since its 2017 founding, received a notice from Nasdaq last Friday that its shares were being pulled.To get more news about luckin coffee china, you can visit shine news official website.

According to Luckin, which shared the news of its delisting on Tuesday, Nasdaq cited “public interest concerns” following the company’s recent accounting scandal as the key reason it's being delisted. The Nasdaq suspended trading in the former unicorn on April 7, five days after an internal investigation uncovering massive fraud in the company’s accounts sent shares plummeting 83%. According to the company’s report, sales between the second and fourth quarters of 2019 were exaggerated by $310 million. Last week, Luckin’s board fired both chief operating officer Liu Jian and company founder and CEO Jenny Qian. Luckin plans to appeal Nasdaq’s decision and says it will remain listed while pending an outcome of its request, which could take more than month. The brouhaha over Luckin’s fraud, however, could become the impetus Washington needs to act on its longtime threat to impose tougher regulations against Chinese stocks.Luckin joined Nasdaq in 2019 through a $600 million IPO.

Investors piled into the young brewhouse, praising Luckin as an innovative rival to Starbucks. Analysts were more skeptical of the firm’s growth prospects, however. By late 2018 Luckin had accumulated $2.4 billion in debt as it burned cash to spread stores across China and doled out free coffee to lure more customers. The company’s business strategy of rapid expenditure and a rush to IPO is familiar among Chinese startups—consider electric-car maker Nio, which raised $1 billion in a 2018 IPO when it was just four years old and hemorrhaging cash. By the end of 2019, the car company had accumulated $5 billion in losses and its market cap had plummeted 74% from a peak of $11.9 billion. The fallout from Luckin’s fraud will likely be bad news for others hoping to emulate that fast and furious model.

Reuters reports Nasdaq plans to introduce new restrictions on foreign IPOs, including imposing a $25 million minimum sale value. Currently, Nasdaq has no requirements on minimum sales, and of the 155 Chinese companies that have listed on Nasdaq since 2000, 40 had IPOs worth less than $25 million. Calls for greater scrutiny of Chinese stocks have echoed around Capitol Hill since at least 2011, when over 100 Chinese companies were forced to delist or had trading on the New York Stock Exchange suspended because of accounting irregularities. According to McKinsey, the scandal stripped more than $40 billion in value from the market.

The issue is that although Chinese companies are required to undergo an audit in order to list, the Securities and Exchange Commission (SEC) struggles to vet the audits. Beijing runs interference, often treating the information as a state secret. As tensions between China and the U.S. escalate amid the coronavirus pandemic, however, Washington has grown more vocal about taking Chinese stocks hostage.Responding to a question about reports of Nasdaq’s new rules Tuesday, White House economic adviser Larry Kudlow told Fox Business that “nobody really can invest with confidence in China.” “We have learned that Chinese companies are not transparent. They do not meet the norms, the regulations,” Kudlow said.A week earlier, President Donald Trump told the same network he was looking “very strongly” at requiring Chinese companies to comply with U.S. audit standards.