Reinout Schakel, chief financial officer of Luckin Coffee Inc., speaks during a television interview ahead of the company's initial public offering (IPO) at the Nasdaq MarketSite in New York, on Friday, May 17, 2019.

Luckin Coffee disclosed Thursday that an internal investigation has found that its chief operating officer fabricated 2019 sales by about 2.2 billion yuan ($310 million).

Shares cratered more than 80% in premarket trading after the release of the regulatory filing. Recently shares were down nearly 72%, wiping out nearly $5 billion from its market value.

The investigation found that Jian Liu, Luckin's chief operating officer, and several employees who reported to him, had engaged in misconduct, including fabricating sales. Liu and the employees implicated in the misconduct have been suspended, and Luckin said it will take legal action against those responsible.

Jian couldn't be located for comment.

The 2½-year-old company, which had hoped to overtake Starbucks as China's top coffee chain, said investors should not rely on its prior financial statements and earnings releases for the nine months ended Sept. 30. The coffee chain previously said net sales for the first nine months of 2019 were 2.9 billion yuan ($413 million).