SHANGHAI (Reuters) – Chinese regulators have asked top executives of ride hailing giant Didi Global Inc to devise a plan to delist from U.S. bourses on data security fears, Bloomberg News reported.
China’s tech watchdog wants the management to take the company off the New York Stock Exchange on concerns about leakage of sensitive data, the report https://www.bloomberg.com/news/articles/2021-11-26/china-is-said-to-ask-didi-to-delist-from-u-s-on-security-fears?sref=ZoyErlU1 said, citing people familiar with the matter.
Didi and the Cyberspace Administration of China did not respond to Reuters requests for a comment. Shares in SoftBank Group Corp, which has a minority stake in Didi, fell more than 5%.
Proposals under consideration include a straight up privatization or a share float in Hong Kong followed by a delisting from the United States, according to the news report.
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 initial public offering could prompt lawsuits or shareholder resistance, the report said, citing sources.
Didi ran afoul of Chinese authorities when it pressed ahead with its New York listing in June, even though the regulator had urged the company 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 and ordered app stores to remove 25 mobile apps operated by Didi.
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 protection, and would protect users’ rights.