DiDi taxi service may leave the US exchange at the request of the Chinese regulator

by time news

China’s Cyberspace Administration, the national internet regulator, has asked the country’s largest taxi service, DiDi, to develop a delisting plan from the New York Stock Exchange, Bloomberg writes, citing knowledgeable sources.

According to the publication, the request of the Chinese regulator is connected with concerns about the possible leakage of personal data of users in the United States. DiDi was asked to think over the details of leaving the exchange, which the government has yet to approve. Among the options being considered are direct privatization or listing on the Hong Kong Stock Exchange immediately after leaving the New York Stock Exchange, Bloomberg sources told.

In the first case, DiDi will have to repurchase shares at least at the IPO price level, that is, $ 14 per American Depositary Share (ADS). If the price is lower, then the company could face numerous lawsuits. At the close of the New York Stock Exchange on November 24 (November 25, it was closed due to the weekend), the company’s shares were trading at $ 8.11 per share, which is 72% less than the IPO price. In the case of a secondary listing in Hong Kong, the company’s securities may be listed at prices below current levels. According to the agency’s sources, the decision has not yet been made and the regulator may change its mind.

DiDi listed shares in New York in June this year, during which it sold 317 million ADS for $ 4.4 billion.DiDi’s listing was the second largest IPO of a Chinese company in the United States after e-commerce giant Alibaba, which raised $ 25 billion in 2014. The move, however, angered Chinese regulators, who suggested that the taxi service first conduct a security check on their networks. As reported by The Wall Street Journal, China’s Cyberspace Administration asked to postpone the IPO, but the company accelerated preparations for it and placed shares on June 30, although it had previously planned to go public only in the second half of 2021.

Even before the IPO, the agency launched an antitrust investigation against the company, and two days after going public, it launched another check to “protect national security.” At the time of the check, the regulator demanded to remove the DiDi application from all online stores in the country due to violations of the law on the collection of customer data and to stop the registration of new users.

According to Reuters, DiDi is waiting for the investigation to be completed by December 10 and has already postponed about $ 1.6 billion to cover a potential fine. The applications may be restarted before the end of the year.

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