Luckin Coffee faces possible delisting after fabrication of sales data

Luckin Coffee Inc, the so-called rival to Starbucks in China, has exposed itself to the risks of delisting and even bankruptcy due to severe fabrication of sales data, experts said.

The Nasdaq-listed Chinese coffee chain saw its share price crash more than 75 percent to $6.40 on Thursday after the company disclosed that its earnings results were substantially inflated. It dropped nearly 15 percent more in the first two hours of trading on Friday.

Liu Jian, chief operating officer and a director of the company, and several employees reporting to him, had engaged in misconduct, including fabricating transactions, a company statement said on Thursday.