(Yicai Global) Sept. 22 -- Luckin Coffee’s shares rose after the Chinese coffee store chain, which was fined USD180 million by US regulators in December for faking sales, said it had settled a USD187 million class action lawsuit and returned to normal financial reporting.

Luckin Coffee [OTCMKTS: LKNCY], whose stock trades on the over-the-counter market in New York, was up 0.2 percent at USD15.08 as of 9 p.m. local time, after gaining 3.4 percent yesterday. The shares are still 70 percent below a January 2020 peak.

The Xiamen-based company has agreed a deal with the lead plaintiffs to fully resolve all claims that have been or could be filed on behalf of a class of purchasers of its American depository shares from May 17, 2019 through July 15, 2020, it said in an annual earnings report published yesterday.

“This settlement will resolve a significant contingent liability and enable Luckin Coffee to move forward with a greater focus on our operations and the execution of our strategic plan,” Chief Executive Guo Jinyi said. “We are working diligently to enter into formal settlement agreements and obtain necessary court approvals.”

Luckin Coffee was brought low by a short seller’s report in January 2020 that accused it of fraud. The firm has since confessed to inflating its 2019 revenue by as much as CNY2.12 billion and its costs and expenses by CNY1.34 billion. It was expelled from the Nasdaq in June last year, ending a 400-day listing.

The class action settlement will be calculated based on a global settlement amount of USD187.5 million, which will be reduced on a pro-rata basis based on the valid opt-out notices received pursuant to the US court’s prior order approving dissemination of a notice of pendency, according to its financial report.

Revenue jumped 33 percent to CNY4.03 billion (USD618.1 million) last year as Luckin Coffee raised its prices and despite the Covid-19 pandemic and restructuring, the report showed.

Operating expenses stood at CNY6.6 billion, in line with Luckin Coffee’s business expansion, and included CNY475.3 million in losses and expenses related to investigations and restructuring caused by the accounting scandal. The firm did not mention net losses.

In China at the end of last year, Luckin Coffee had 3,929 own stores in 56 cities and 874 partnership outlets. It also had about 9.8 percent more transacting customers at 64.9 million.

Editor: Peter Thomas