Didi, a Chinese ride-hailing company, announced on Friday that it will delist from the New York Stock Exchange and prepare for a Hong Kong public listing, following months of pressure from Chinese regulators who barred the company from adding new users and ordered a cybersecurity investigation into its practices.
Didi originally disclosed its delisting plans in a post on the Chinese social media site Weibo, claiming that the decision was reached after “careful investigation.”
Didi Global stated in a separate announcement to its investors that the action had been approved by its board of directors.
Didi said it will delist its NYSE shares while guaranteeing that they are convertible into shares that may be freely traded on another globally recognized stock, rather than buying out all publicly owned shares, which would cost the business billions.
Didi launched on the New York Stock Exchange in June of this year, garnering $4.4 billion in its first public offering. The business was valued at $68 billion at the time of its IPO, a figure that momentarily soared even higher. However, in July, the company’s shares began to fall as Chinese officials launched an inquiry into the company’s cybersecurity policies.
The Chinese Cyberspace Administration (CAC) has ordered the removal of 25 Didi-operated applications from Chinese app stores, as well as the company’s ability to sign up new clients. The fact that Didi went through with its IPO in the United States despite being urged to put it on hold until a review of its data security standards was undertaken allegedly enraged Beijing authorities.
While the Didi probe is still underway, according to Reuters, the business expects it to be completed by the end of the year and is prepared to relaunch its applications in the nation.
In the midst of ongoing diplomatic tensions with China, politicians in Washington have taken steps to target Chinese corporations that are publicly traded in the United States. Foreign businesses might be pulled off American stock markets if their auditors do not comply with demands for information from US authorities, according to a new law approved last year.
The Wall Street Journal reported in August that Beijing was working on new restrictions that would prevent some Chinese firms that deal with sensitive customer data from going public in other countries.
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