China app giant Didi plans US stock market exit in move to Hong Kong

China app giant Didi plans US stock market exit in move to Hong Kong
Didi's IPO was the biggest listing in the US by a Chinese company since Alibaba's debut in 2014. Source: Getty images
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Daily US Times: Chinese ride-hailing giant Didi Global has announced plans to take its shares off the New York Stock Exchange (NYSE) and move its listing to Hong Kong.

The firm has come under intense pressure since its US debut in July.

Within days of the initial public offering (IPO) Beijing announced a crackdown on technology companies listing overseas.

Earlier on Thursday the US market watchdog unveiled tough new rules for Chinese firms that list in America.

“Following careful research, the company will immediately start delisting on the New York stock exchange and start preparations for listing in Hong Kong,” the company said on its account on Weibo, China’s Twitter-like microblogging network.

In a separate English language statement Didi said its board had approved the move, adding: “The company will organise a shareholders meeting to vote on the above matter at an appropriate time in the future, following necessary procedures.”

At the end of June, Didi – China’s answer to Uber – raised $4.4bn (£3.3bn) in its New York IPO.

However, trading was muted on the first day as investors weighed concerns over tensions between Washington and Beijing, and issues raised by US regulators over some Chinese firms’ financial reports.

Within days China’s internet regulator ordered online stores not to offer Didi’s app, saying it illegally collected users’ personal data.

The Cyberspace Administration of China (CAC) said it was investigating the firm to protect “national security and the public interest”.

In response Didi said in a statement: “The company will strive to rectify any problems, improve its risk prevention awareness and technological capabilities, protect users’ privacy and data security, and continue to provide secure and convenient services to its users.”

Didi also warned that the removal of its app from Chinese stores would have an adverse impact on its revenues.

Like many other Chinese technology companies Didi has also come under pressure from regulators in the US and Europe.

On Thursday, the US Securities and Exchange Commission said it had finalised rules that would mean US-listed foreign companies can be delisted if their auditors do not comply with requests for information from regulators.

The law was passed in 2020 after Chinese regulators repeatedly denied requests from US authorities to inspect the the accounts of Chinese firms that list and trade in the US.

Meanwhile in August, a company source told the BBC that it had halted plans to launch in the UK and continental Europe.

It had been planning to roll out services in Western Europe, including major British cities.

Japan’s SoftBank is Didi’s largest single investor with a stake of more than 20%. It is also backed by Chinese technology giants Alibaba and Tencent.

Uber also owns a stake in the firm as a result of Didi taking over Uber China in 2016.

Didi Global shares have lost more than 40% of their value since their US market debut.

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