Economy

Didi, a Chinese app company, is planning to leave the US stock market and relocate to Hong Kong

The firm has been the subject of considerable attention since its debut in the United States in June.

Just days after their initial public offering, Beijing announced a crackdown on technology businesses that list outside (IPO).

On Thursday, the US Securities and Exchange Commission (SEC) announced stringent new regulations for Chinese companies seeking to list in the US.

“Following rigorous investigation, the business will immediately commence delisting from the New York stock exchange and begin preparations for listing in Hong Kong,” the company stated on Weibo, China’s Twitter-like microblogging network.

Didi stated in a second English-language statement that its board had approved the move and that the firm would “organise a shareholders meeting to vote on the aforementioned item at an appropriate time in the future, following applicable processes.”

Didi, China’s version of Uber, raised $4.4 billion (£3.3 billion) in its June IPO in New York.

On the first day of trading, however, investors considered concerns about tensions between Washington and Beijing, as well as objections highlighted by US regulators about some Chinese companies’ financial reports.

China’s internet regulator ordered online merchants to stop selling Didi’s app within days, stating that it was illegally collecting personal data from customers.

The Chinese Cyberspace Administration (CAC) announced that it was investigating the corporation in order to protect “national security and the public interest.”

In response, Didi issued a statement saying, “The company will endeavour to fix any faults, strengthen its risk prevention knowledge and technological capabilities, protect users’ privacy and data security, and continue to deliver secure and convenient services to its users.”

Didi also warned that deleting its app from Chinese app stores will result in a revenue decrease.

Regulators in the United States and Europe, as well as many other Chinese technology businesses, have put pressure on Didi.

On Thursday, the US Securities and Exchange Commission stated that it had finalised guidelines that will allow US-listed foreign businesses to be delisted if their auditors do not comply with authorities’ information requests.

The measure was passed in 2020 after Chinese officials consistently refused demands from US authorities to audit the finances of Chinese enterprises that list and trade in the US.

It planned to roll out services across Western Europe, including key British cities.

SoftBank, a Japanese conglomerate, is Didi’s largest single investor, owning more than 20% of the company. Two Chinese technology behemoths, Alibaba and Tencent, are also on board.

Uber now has an interest in Uber China, thanks to Didi’s acquisition of the company in 2016.

Didi Global shares have lost more than 40% of their value since their IPO on the New York Stock Exchange.

From Alibaba to Tencent, Chinese technology businesses have been scrutinised both at home and overseas.

Didi, China’s ride-hailing colossus, has been at conflict with Chinese regulators for months.

Beijing took Didi from app stores just days after it went public on Wall Street in late June, alleging the firm of breaking a data security law, which stunned investors.

Beijing has also issued measures to protect the rights of millions of ride-hailing drivers in an effort to promote the sector’s growth.

American officials, on the other hand, have been keeping a tight eye on Chinese enterprises.

Didi has stated that it would list in Hong Kong and that shareholders of its US-listed shares will be allowed to transfer their interests to another stock exchange.

The company intends to relaunch its apps in China by the end of the year.

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