The ride-hailing giant shed US$70bil (RM307.72bil) of market value at one point after regulators suspended its apps from stores, imposed curbs on overseas listings and tightened up on Didi’s industry in the wake of its June 2021 IPO. — Reuters
Chinese regulators are preparing to wrap up their investigation into Didi Global Inc and restore the ride-hailing giant’s main apps to mobile stores as soon as this week, the Wall Street Journal reported.
Regulators are also finishing up their probes into data security at two other firms, Full Truck Alliance Co and online recruitment platform Kanzhun Ltd, the Journal said, citing unidentified people familiar with the discussion. Agencies including the Cyberspace Administration of China told executives from the three companies of their plan during meetings last week, the Journal added.
The three companies are expected to face financial penalties, including a relatively large fine for Didi, the report cited some of the people as saying. All three will also offer to transfer 1% of their shares to the state, giving officials greater say in running the business, the Journal reported. Didi representatives didn’t immediately respond to requests for comment.
Didi surged 38% at 12.54pm in New York trading, while Full Truck climbed about 7% and Kanzhun jumped almost 20%. The Hang Seng Tech Index gained 2.7% in Hong Kong. Investors have been awaiting the outcome of the probe into Didi, launched in July after the ride-hailing firm proceeded with its US$4.4bil (RM19.34bil) US IPO despite Beijing’s objections.
“It is a sign that regulators are following through on their pledge to end the crackdown on tech platforms, which will likely continue to improve sentiment on the sector,” Bloomberg Intelligence analyst Marvin Chen said.
The ride-hailing giant shed US$70bil (RM307.72bil) of market value at one point after regulators suspended its apps from stores, imposed curbs on overseas listings and tightened up on Didi’s industry in the wake of its June 2021 IPO. The company, once feted as the national champion that drove Uber Technologies Inc out of China, has since come to symbolise the extent to which Beijing is willing to go to curb the power and influence of its most successful Internet corporations.
The Journal’s report coincides with expectations that the government is pumping the brakes on its yearlong crackdown on tech, to avoid further damaging the economy.
It’s unclear how that would affect its delisting or future IPO plans. Didi has secured the blessing of shareholders to delist from the New York Stock Exchange soon – allowing the company to begin preparing for a Hong Kong share float, the best outcome investors have said they can hope for. – Bloomberg
