Luckin is being sued by Chinese investors under brand new law

A group of Chinese investors who lost money on Luckin Coffee have filed the first in a batch of lawsuits to a local court over the beverage chain’s alleged accounting fraud, the lawyer representing them told TechNode Thursday. They are suing the company for making false financial statements that led to investor losses.

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. 

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Written by Aakash Malu


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