EMBATTLED Chinese coffee chain Luckin Coffee is among a raft of 45 companies hit with a combined fine of nearly US$9 million over a scandal involving false sales figures, China’s market regulator said yesterday.

Luckin, Starbucks’ rival in China, had boosted transactions last year through fake coupons by 2.25 billion yuan (US$330 million) and inflated its revenue by some 2.12 billion yuan, according to an earlier probe by the finance ministry.

The scandal led to the company being delisted from New York’s Nasdaq and the removal of top executives.

The State Administration for Market Regulation yesterday said investigations found that Luckin, with the help of other companies, had falsely increased its 2019 sales revenue, costs and profit margins and imposed a combined fine of 61 million yuan.

The coffee chain launched in 2017 and aimed to dethrone Starbucks in China via an aggressive growth strategy, enticing customers with an app-based purchasing model that prioritized takeaway and delivery options, as well as generous mobile coupons.

(SD-Agencies)