Home business China reportedly pressuring Didi to delist from NYSE #China #reportedly #pressuring #Didi #delist #NYSE

China reportedly pressuring Didi to delist from NYSE #China #reportedly #pressuring #Didi #delist #NYSE

by englishheadline
0 comment


Chinese regulators have pressed top executives of ride hailing giant Didi to devise a plan to delist from the New York Stock Exchange due to concerns about data security, two people with knowledge of the matter told Reuters.

China’s powerful Cyberspace Administration of China (CAC) has asked the management to take the company off the US bourse due to worries about leakage of sensitive data, said one of the people.

It also wants the ride-hailing giant to promise it would solve the delisting issue within a certain period of time, said the person.

The cyberspace regulator said, according to the person, the prerequisite for the relaunch of Didi’s ride-hailing and other apps in China is that the company has to agree to delist from New York.

Proposals under consideration include a straight-up privatization or a second listing in Hong Kong followed by a delisting from the United States, said the person.

In July, the CAC ordered app stores to remove 25 mobile apps operated by Didi – just days after the company listed in New York. It also told Didi to stop registering new users, citing national security and the public interest.

The prerequisite for the relaunch of Didi’s ride-hailing and other apps in China is that the company has to agree to delist from New York, sources told Reuters.
NurPhoto via Getty Images

Reuters reported earlier this month that Didi is preparing to relaunch its apps in the country by the end of the year in anticipation that Beijing’s cybersecurity investigation into the company would be wrapped up by then, citing sources directly involved in the relaunch.

Neither Didi nor the CAC responded to Reuters’ requests for comments.

The people declined to be identified as they were not authorized to speak to the media.

President of Didi Liu Qing (left) and CEO of Didi Cheng Wei attend a launch event of D1 electric vehicle on November 16, 2020 in Beijing, China.
Shares of Didi, led by its president, Liu Qing (left), and its CEO, Cheng Wei, have fallen 42 percent since it went public in June 2021.
VCG via Getty Images

Bloomberg first reported regulators’ request for Didi to delist on Friday. Shares in Didi investors SoftBank and Tencent fell more than 5% and 3.1%, respectively following the report.

SoftBank Vision Fund owns 21.5% of Didi, followed by Uber with 12.8% and Tencent’s 6.8%, according to a filing in June by Didi.

If the privatization proceeds, shareholders would likely be offered at least the $14 per share IPO price, since a lower offer so soon after the June offering could prompt lawsuits or shareholder resistance, the report said, citing sources.

A smiling man leans out of the window of a Didi taxi
Chinese regulators launched an investigation into Didi over its collection and use of the app’s users’ personal data, which regulators said had been collected illegally.
South China Morning Post via Getty Images

Shares of Didi, which have fallen 42% since it went public in June, were down 6.3% at $7.60.

The company ran afoul of Chinese authorities when it pressed ahead with its New York listing, despite the regulator urging it to put it on hold while a cybersecurity review of its data practices was conducted, sources have told Reuters.

Soon after, the CAC launched an investigation into Didi over its collection and use of personal data. It said data had been collected illegally.

Chinese President Xi Jinping seated in front of a microphone with a Chinese flag hanging on a pole in the background
China, led by President Xi Jinping, has been aiming to rein in the power of tech giants after years of unfettered growth.
Getty Images

Didi responded at the time by saying it had stopped registering new users and would make changes to comply with rules on national security and personal data usage and would protect users’ rights.

China’s tech giants are under intense state scrutiny over anti-monopolistic behavior and handling of their vast consumer data, as the government tries to rein in their dominance after years of unfettered growth.



.

#China #reportedly #pressuring #Didi #delist #NYSE

You may also like

Leave a Comment

close