Ride-hailing giant Didi is being pushed by Beijing to delist from the New York Stock Exchange over concerns about data security, two sources said.
China’s powerful Cyberspace Administration of China (CAC) is pressing the firm’s management to take the company off the US bourse sooner rather than later, the sources said, before it will allow the relaunch of Didi’s ride-hailing and other apps in China.
Proposals under consideration include a straight-up privatisation or a second listing in Hong Kong followed by a delisting from the United States, said one of the sources.
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.
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.
SoftBank Vision Fund owns 21.5% of Didi, followed by Uber Technologies Inc with 12.8% and Tencent’s 6.8%, according to a filing in June by Didi. As of Thursday’s close, Didi’s shares had fallen 42% to $8.11 since it went public in June.
The company ran foul 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 said.
CAC Didi Investigation
Soon after, the CAC launched an investigation into Didi over its collection and use of personal data. It said data had been collected illegally.
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 behaviour and handling of their vast consumer data, as the government tries to rein in their dominance after years of unfettered growth.
- Reuters with additional editing by Sean O’Meara