Luckin Coffee Inc. shares sank 81% in Thursday trading after it formed a special committee of three independent directors to investigate "misconduct, including fabricating certain transactions" that spanned the second through fourth quarters of 2019 and involves RMB2.2 billion (about $310.1 million). Jian Liu, chief operating officer at Luckin Coffee and a director of the company, has been suspended along with other staff implicated in the misconduct. And the company has suspended or terminated contracts and deals with parties involved. Luckin Coffee may also take legal action against those involved. The company says the investigation is in preliminary stages and it is still examining the financial impact. "As a result, investors should no longer rely upon the Company's previous financial statements and earning releases for the nine months ended September 30, 2019 and the two quarters starting April 1, 2019 and ended September 30, 2019, including the prior guidance on net revenues from products for the fourth quarter of 2019, and other communications relating to these consolidated financial statements," Luckin Coffee said in a statement. Luckin has been a competitor to Starbucks Corp. /zigman2/quotes/207508890/composite SBUX +1.52% in China selling coffee and other goods. In February, short seller Muddy Waters Research raised allegations of fraud. Luckin Coffee denied the allegations at the time. Luckin stock has fallen 33.4% for the year to date while the S&P 500 index /zigman2/quotes/210599714/realtime SPX +1.60% is down 23.5% for the period.