Luckin Coffee Scandal Deals Blow to China Inc.’s Reputation (1)

The fallout from Luckin Coffee Inc.’s accounting scandal is spreading far beyond the high-flying Starbucks challenger, with renewed concerns about Chinese corporate governance dragging down stocks across industries and threatening to bring a halt to the country’s overseas initial public offerings.

The Xiamen-based coffee chain said on Thursday that its chief operating officer and some underlings may have fabricated billions of yuan in sales, upending what was supposed to be one of China’s best growth stories. Luckin Coffee shares plunged as much as 81% in U.S. trading and CAR Inc., a rental company founded by Luckin Coffee’s chairman, ...