The executives of the Chinese technology company Didi Global received a request “that cannot be refused”, citing the famous phrase from The Godfather. The Technological Supervisory Authority of the People’s Republic has in fact asked the leaders of the big tech – the largest company in the world of passenger transport services – to develop a plan for the delisting from US stock exchanges: according to Bloomberg reports, this is an unprecedented demand that rekindles fears about Beijing’s tightening of control over its gigantic tech industry.
The supervisor wants management to take the company off the New York Stock Exchange due to concerns about the loss of sensitive data. The Cyberspace Administration of China, the agency responsible for data security in the country, has ordered Didi to come up with a precise detailed plan to be submitted for government approval. The proposals under consideration include a sale of shares or a share price in Hong Kong followed by a delisting from the United States, sources told Bloomberg.
A hard blow to another big player
In the former case, the proposal will likely be at least the IPO price of $ 14, as a lower offer immediately following the initial public offering in June could lead to legal action or shareholder resistance. If there is a secondary listing in Hong Kong, however, the IPO price could likely be lower than the US stock price of $ 8.11 at close on Wednesday.
Either option on the table, either way, would deal a heavy blow to a giant that made the largest U.S. company listing since Alibaba in 2014. Representatives from Didi and the CAC haven’t responded to requests for comment from Bloomberg.
The wrath of Beijing
Beijing’s anger would have been the decision to proceed with the listing in New York this summer, despite requests from the authorities to ensure the security of its data before the IPO. Chinese regulators quickly launched multiple investigations into the company and considered an unprecedented string of sanctions, Bloomberg News reported in July.