Luckin Coffee co-founder apologizes for accounting scandal and promises fight to save the company

Lu Zhengyao apologized this week for the scandal that has been plaguing the company once hailed as China’s homegrown rival to Starbucks (SBUX).
Luckin (LK) admitted earlier this year that a good portion of its 2019 revenues were fabricated. Its shares collapsed following the revelations, falling more than 75% before being halted on April 6.

“I’ve been in deep pain and remorse,” Lu said in a statement on Wednesday, which was widely reported by multiple Chinese media outlets, including The Paper and China Business Network, both owned by state-controlled corporations.

“I can’t sleep at night. If the company is delisted, it will surely face more difficulties and increased pressure,” he added.

Luckin Coffee's co-founder insisted he "didn't play tricks" in order to cheat investors.

Luckin did not immediately respond to a request for comment.

Nasdaq informed the company of its plans to remove the company’s shares from the exchange in a May 15 notice, according to Luckin.

The Xiamen-based company said on Monday that it has requested a hearing on the delisting notice, and the stock will remain on Nasdaq until the hearing, which should take place within the next 30 to 45 days.

Luckin Coffee fires CEO and COO after accounting scandal

Lu, who is also chairman of the company’s board, insisted he “didn’t play tricks” in order to cheat investors. He asked for people from all walks of life to go easy on Luckin Coffee and support the company, noting that “tens of thousands of employees are still working hard.”

Whatever happens, Lu said he will “spare no effort” in minimizing shareholders’ losses.

Shares in the company resumed trading on Wednesday, and fell nearly 36%. Its stock is currently worth $2.82 — less than the price of a Luckin latte in China.

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