Chinese regulators urged Didi to postpone its IPO in the United States
- 6th July 2021
- Posted by: Hakeem
- Category: Stock
China’s cybersecurity watchdog suggested Didi Global Inc delays its initial public offering and urged it to review its network security, weeks before the Chinese ride-hailing giant went public.
This new information was revealed by the Wall Street Journal as it states that is unknown whether Didi conducted its own investigation. However, a source close to the company revealed that the company eventually chose to proceed with the IPO due to mounting investor demand for a large dividend.
Crackdown on Didi and other tech platforms
Didi was investigated by the Chinese Cyberspace Administration (CAC) on Friday, only two days after the business began trading on the New York Stock Exchange. Didi’s app downloads were suspended by the agency on Sunday after it was discovered that the business had improperly gathered personal user data.
Didi claimed in a statement on Monday that it had no idea CAC would begin an investigation into the firm and ask its app to be taken down before its $4.4 billion IPO.
According to the WSJ report, officials in Beijing, particularly those at CAC, were concerned that the ride-hailing giant’s troves of data could fall into foreign hands as a result of the increased public exposure connected with a U.S. listing.
After ordering the expulsion of Didi from Chinese app stores, which sent tech stocks falling, Beijing has widened its crackdown on tech platforms, targeting more US-listed companies.
What this means
China’s cyberspace authority’s assault on Didi and other tech companies signalled a new offensive against the country’s tech industry, based on cybersecurity legislation. China’s financial and competition watchdogs have already fined companies including Ant Business and Alibaba, two cornerstones of billionaire Jack Ma’s online empire, as well as eCommerce group, Meituan.