China’s securities regulator said on Friday it would investigate claims of fraud at Luckin Coffee Inc.

China’s securities regulator said on Friday it would investigate claims of fraud at Luckin Coffee Inc.

Shares of Luckin, which competes in China with Starbucks, sank as much as 81% on Thursday after it announced an internal investigation had shown its chief operating officer fabricated sales deals.

The company said it had suspended COO Jian Liu and employees reporting to him following initial recommendations from a special committee.

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