[Epoch Times, February 5, 2022](The Epoch Times reporter Liu Yi comprehensive report) Ruixing Coffee, which was fined $180 million (about 1.2 billion yuan) by the United States for fraud, has paid the fine a few days ago. According to the current unit price of coffee latte sold by Ruixing Coffee, it has to sell 75 million cups to earn 1.2 billion.
According to the “Securities Times” report on February 5, on February 4, local time in the United States, Ruixing Coffee submitted a document to the US Securities and Exchange Commission (SEC), stating that the company has met the conditions of the previous settlement agreement with the SEC, that is, New York, United States. The final judgment of the Southern District Federal Court agreed with Luckin Coffee to pay a fine of $180 million.
On the same day, the SEC submitted a notice to the court, confirming that Luckin Coffee paid cash to the company’s securities holders through a debt restructuring arrangement, which has satisfied the penalty clause of the final judgment of the court.
In addition to compensating investors, Ruixing also formally submitted a debt restructuring plan for convertible bond creditors to the Cayman court, and formally submitted its 2020 annual report, including audited financial reports, to the SEC. So far, the financial fraud incident of Ruixing has come to an end.
According to reports, Luckin Coffee paid a fine of 1.2 billion yuan and had to sell 75 million cups of latte to earn it back.
Review of Ruixing’s fraud incident
On January 31, 2020, Muddy Waters, a well-known international short-selling agency, claimed that it had received an 89-page anonymous short-selling report, alleging that Luckin’s data was fraudulent. On February 3, Ruixing denied all allegations by Muddy Waters.
On April 2, 2020, Ruixing Coffee issued an announcement admitting that it had falsely traded 2.2 billion yuan. The news caused its stock price to plummet by 80%, and trading was suspended several times during the session. On April 5, Luckin Coffee issued an apology statement.
On April 2, 2020, several U.S. law firms issued statements reminding investors that the class action lawsuit against Luckin Coffee is approaching the deadline for filing.
In the early morning of April 4, 2020, Ruixing Coffee revealed that the fraudulent 2.2 billion incident continued to ferment. At the close on Friday, Ruixing’s stock price fell again by 15.94%.
On April 7, Luckin Coffee announced a suspension of trading, and trading will continue to be suspended until the supplementary information required by Nasdaq is fully met.
On the evening of May 19, Ruixing Coffee announced that it had received a notification from the Nasdaq exchange to request delisting from Nasdaq.
On June 27, Luckin Coffee issued a statement that it will suspend trading on June 29 and file for delisting.
On December 16, Luckin Coffee announced that it would pay $180 million to settle accounting fraud charges brought against it by the U.S. Securities and Exchange Commission.
In February 2021, Luckin Coffee filed for bankruptcy protection in the United States.
In September 2021, Luckin Coffee announced that it had signed a $187.5 million letter of intent to settle with the representative plaintiffs of the U.S. class action.
On February 4, 2022, Luckin Coffee paid a fine, and the company’s financial fraud came to an end.
At present, it is still unclear whether Luckin Coffee, which is traded in the U.S. powder sheet market, will be re-listed in the future.
Responsible editor: Lin Congwen