(Yicai Global) Oct. 12 -- Luckin Coffee and four companies embroiled in the Chinese coffeehouse chain’s multi-million dollar bookkeeping fraudalso fabricated millions of orders.

They overstated orders by 123 million and were involved in false advertising, China’s markets regulator said today as it published details of more breaches by Luckin and the four others. Last month, it slapped a CNY61 million (USD9.1 million) fine on Xiamen-based Luckin and more than 40 other firms.

Luckin Coffee China and its Beijing branch, with the assistance of firms including Beijing Auto World Consulting Service, Beijing Shenzhou Youtong Technology Development and Zhengzhe International Trade Xiamen, inflated sales revenue, costs, and profit margin figures from April to December last year to gain an unfair advantage, the State Administration for Market Regulation said in its statement.

Luckin used “click farming on individual and corporate purchase orders” and “corporate customer transaction fraud” to exaggerate revenue and collectively fabricated orders, with coffee coupons, via sham deals, forged bank statements, setting up fake databases and falsifying consumption records.

The company violated China’s Unfair Competition Law and constituted false advertising, according to the regulator, which also fined the five firms CNY2 million (USD296,386) each. The law allows a penalty of between CNY1 million and CNY2 million for cases of serious false advertising.

On April 2, Luckin announced that Chief Operating Officer Liu Jian had committed financial fraud, involving CNY2.2 billion (USD325.9 million) of transactions a month. In the same month, the market regulator set up a task force to investigate.

The fraud led to multiple lawsuits against Luckin, which ceased trading on the Nasdaq on June 29, a little over 400 days after it went public. At the start of the listing, Luckin Coffee [NASDAQ: LK] was trading at USD17. They ended at USD1.38, with an overall market capitalization of just USD347 million.

Editor: Peter Thomas