Starbucks rival Luckin Coffee faked nearly half of its roughly $732 million in sales, according to an internal investigation that found the Chinese coffee giant's COO fabricated orders

• Luckin Coffee, a swiftly-growing Chinese coffee chain, fabricated more than $310 million worth of transactions in 2019, according to an internal investigation.
• The preliminary investigation found that almost half of the company's roughly $732 million in sales last year had been fabricated by Luckin COO Jian Liu.
• Luckin Coffee shares plummeted more than 84% on Thursday morning.
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Luckin Coffee fabricated hundreds of millions of dollars worth of coffee orders last year, according to an internal investigation.

On Thursday, the company announced that its preliminary investigation uncovered fabricated transactions accounting for a total of RMB 2.2 billion ($310 million) from the second to the fourth quarter of 2019. Certain costs and expenses had also been substantially inflated, according to the investigation.

Based on its falsified financials, Luckin Coffee was expected to generate $732 million in sales in 2019, according to Investor Place. In other words, the fabricated transactions appear to have made up almost half of the chain's sales in 2019.

In a statement, Luckin Coffee said that its chief operating officer Jian Liu and several other employees were engaging in misconduct, including fabricating transactions, starting in the second quarter of 2019.

"The Special Committee recommended certain interim remedial measures, including the suspension of Mr. Jian Liu and such employees implicated in the misconduct and the suspension and termination of contracts and dealings with the parties involved in the identified fabricated transactions," Luckin Coffee said in a statement.

In February, Luckin Coffee denied what it called "misleading and false allegations" that the chain had inflated sales.

After the company announced the findings of the internal investigation Thursday morning, Luckin Coffee shares plummeted more than 84%.

The company was founded in 2017 and went public in May 2019. The unprofitable coffee chain has been growing with extraordinary speed, reporting that it had 3,680 stores open at the end of the third quarter, up from 1,189 a year prior.