Paper details; Chinese corporates have a long history of going public in overseas exchanges for capital financing. Ever since the start of the new millennium, numerous Chinese companies decided to raise capital via stock exchanges in the United States, the United Kingdom or other established exchanges in the world. However, Chinese corporates have a notorious history of being accused of fraud or book-cooking by investors and short-sellers.
Most recently, the “Chinese Starbucks” Luckin Coffee was targeted by famous short seller Muddy Water Research. Muddy Water Research published an 89 pages report “Luckin Coffee: Fraud Fundamentally Broken Business”. Followed by the report, Luckin Coffee’s stock price went downhill followed by formal investigation by both American and Chinese authorities. This paper intends to dive into the history of the “fraud” history by Chinese companies with a specific focus on Luckin Coffees’ up and downs.