Luckin Coffee posted a notice for protection on the company’s website on February 5, 2021.
The announcement shows the company filed an application with the U.S. Court of Justice for the Southern District of New York.
At present, the company is in talks with its stakeholders about the company’s financial debt re-grouping. As soon as the news came out, it immediately attracted high level of attention from all walks of life。
What has happened to this company since it went public on May 17, 2019, just over a year ago? In April 2020, the company declared $2.2 billion in finance to U.S. securities institutions.
After news of fabrication broke, the stock price plummeted. The Company officially ceased trading on the NASDAQ Exchange and entered the de-listing process on June 29, after just over 400 days of trading.
According to Luckin’s website post on July 1 of the same year, the company’s financial fabrication began before it went public in April 2019, with net revenue of $2.12 billion and costs and expenses of $1.34 billion inflated.
Since the incident, the U.S. House of Representatives passed the Foreign Companies Accountability Act on December 2, which requires foreign companies listed on U.S. exchanges to comply with U.S. audit standards or face de-listing. In other words, U.S. securities regulators have tightened the audit requirements for China’s general stock.
At present, there are more than 260 Chinese companies are listed in the U.S., with a market capitalization of more than $2 trillion, or 8.7% of the U.S. market. Market value ranked among the tops are Alibaba, TSMC, China Mobile, JD.com, PetroChina, Sinopec.
The bill’s introduction will certainly have a huge impact on Chinese companies preparing to list in the U.S., especially those that have already made multiple rounds of financing and are ready to be listed in the U.S.
Although the Bill applies to all foreign companies listed in the United States, Chinese companies account for more than 90% of all public companies that have not been effectively audited by U.S. regulators which of course has a huge impact on China shares.
In recent years, with the worsening image of Chinese communist government in the world, financial scandals of Chinese listed companies have been frequent.
For example, the “Good Future Education”, one of China’s largest education groups listed in the U.S., has been accused of falsifying sales revenue and net profit data. Ai Qiyi has been accused of exaggerating user numbers, revenue and acquisition prices, selling toxic milk powder, selling counterfeit on online shopping platforms and other news. China stock is facing a severe credibility crisis in the U.S. market.
It is intentional of Chinese enterprises such as Luckin, using losses to occupy the market and finance its expansion through market capital. These unprofitable junk enterprises sooner or later they will be abandoned by shareholders, enter into bankruptcy and be liquidated.
In addition to financial fabrication, and more importantly, there are widespread violations of U.S. national security activities, including support for the military development of the Communist Party of China.
Article 7 of the National Intelligence Law passed by the Communist Party of China in 2017 stipulates that “any organization or citizen shall support, assist and cooperate with the work of national intelligence in accordance with the law and keep the secrets of the work of national intelligence known to them”.
From the above, we can conclude that all the U.S.-listed Chinese companies are more than capital raising tools available to the Communist Party of China.
These companies not only falsify financial records and defraud vast number of investors’ fund, more importantly, they collect military, commercial, scientific and technological information, posing a major threat to the national security of the United States.
It is time to issue ultimatum to all China Companies, delist and get lost!
Disclaimer: The views expressed here are those of the authors and do not necessarily reflect the views of GNEWS.org.
Original article: https://gnews.org/zh-hans/886694/