The China Securities Regulatory Commission issued a circular on the investigation and disposal of Ruixing Coffee’s financial fraud

Gelonghui July 31丨In ​​April of this year, Luckin Coffee Inc. exposed its financial fraud and received widespread attention. In accordance with the State Council’s Financial Commission’s “zero tolerance” spiritual requirements for financial fraud in the capital market, the China Securities Regulatory Commission, together with the Ministry of Finance, the State Administration for Market Regulation and other departments, suspected violations of laws and regulations against Ruixing Coffee’s domestic operating entities, related parties and related third-party companies. The conduct was filed for investigation, and in accordance with the arrangements of the International Organization of Securities Commissions (IOSCO) cross-border supervision cooperation mechanism, it cooperated with the U.S. securities regulatory authorities to carry out cross-border investigations. At present, the above-mentioned work has made important progress. Investigations by relevant departments showed that Ruixing Coffee’s domestic operating entities and related managers, and related third-party companies fictitious transactions, inflated revenue, costs, expenses, false propaganda, etc., violated China’s “Accounting Law” and “Anti-Unfair Competition” The relevant provisions of the Law. Ruixing Coffee’s domestically-linked NEEQ listed companies Shenzhou UCAR Co., Ltd. and Beijing Hydropower Yiwei Technology Co., Ltd. violated the relevant provisions of my country’s Securities Law. The Ministry of Finance, the State Administration of Market Supervision, and the Securities Regulatory Commission will impose administrative penalties on Ruixing Coffee’s domestic operating entities and related responsible persons, a number of third-party companies that assisted in fraud and false propaganda, two NEEQ affiliated companies and related responsible persons. Recently, the China Securities Regulatory Commission has delivered an advance notice of administrative penalty to the parties involved. If the relevant responsible subject is suspected of committing a crime, it will be transferred to the public security and judicial organs for further accountability.