MILAN – A group of Chinese investors who lost money on Luckin Coffee have filed a lawsuit before a court in the southeastern coastal city of Xiamen, where Luckin is headquartered. The US-listed Chinese company may fall under Chinese courts’ jurisdiction for fraud, thanks to a recent revision to China’s Securities Law.
The new law, which came into effect March 1, added a clause that expanded its authority to cover overseas-listed Chinese companies that have domestic investors.
Yang Zhaoquan, director of Beijing Vlaw Law Firm, said it is the first time investors have tried to hold a company accountable in China for fraud perpetrated in US markets.
He told TechNode that he has sent out documents for the first lawsuit to a court in the southeastern coastal city of Xiamen, where Luckin is headquartered.
Shares of the company plummeted 75.6% on the disclosure that day. Shares of the company were suspended from trading on April 7. The closing price of its shares was $4.39, only 8.8% of its all-time high.
On April 2, Luckin Coffee said one of its top executives and other employees had faked transactions of about 2.2 billion yuan.
Shares of the company plummeted 75.6% on the disclosure that day. Shares of the company were suspended from trading on April 7. The closing price of its shares was $4.39, only 8.8% of its all-time high.
