Luckin Coffee is investigating alleged sales fraud, confirming the suspicion of some pre-IPO investors 🔒www.ft.com
The company is alleged to have fabricated hundreds of millions of dollars in sales. Put together against Uber's public market struggles, and the demise of WeWork, and the FT argues that this is "another nail in the coffin of the growth-without-profits business model." But the scandal could run deeper than Luckin:
US-listed TAL Education admitted it inflated sales link
Baidu's streaming service, iQiyi (another listed in the US) also stands accused of cooking its books link
These scandals could trigger a major backlash against public Chinese stock, which includes the likes of Alibaba. US politicians have tried to increase financial transparency among US-listed Chinese companies for some time.Read more...