Banks are likely to face millions in losses due to the Luckin debacle

According to circles, Credit Suisse, Morgan Stanley and other banks face millions in losses. The background is the balance sheet scandal surrounding Starbucks rival Luckin Coffee.

Luckin's stock market value plummeted in early April when the company announced it may have faked sales of around $ 310 million.

Hong Kong The financial consequences of the balance sheet scandal over the Chinese Starbucks challenger Luckin Coffee Inc. for the banks are gradually becoming clear. Informed circles are facing a $ 300 million charge from Credit Suisse Group AG, Morgan Stanley and other institutions after accepting shares in the now collapsed coffee house chain as collateral when the loan was granted.

As can be heard, the banks have monetized Luckin shares worth around $ 210 million in the past two months. Affected lenders also included Haitong International Securities Group and Goldman Sachs Group Inc.

Luckin's stock market value plummeted in early April when the company announced that the day-to-day executive and some of its employees may have only faked sales of around $ 310 million. Until then, Luckin had been one of the best growth stories in the Chinese economy.

With the price slide, Luckin chairman Lu Zhengyao became insolvent and could no longer service $ 518 million in securities loans, Goldman said at the time.