Business

China asks Didi to remove list from US for fear of data security – Bloomberg News




SHANGHAI, Nov. 26 (Reuters) – Chinese regulators have asked top executives at equestrian giant Didi Global Inc (DIDI.N) to draw up a plan to delist from the New York Stock Exchange due to computer security concerns, Bloomberg News reported.

China̵[ads1]7;s watchdog wants management to take the company off the US stock market due to concerns about leaking sensitive data, the report said, citing people familiar with the matter.

Neither Didi nor the Cyberspace Administration of China responded to Reuters’ requests for comment. The shares of Didi investors SoftBank Group Corp (9984.T) and Tencent Holdings (0700.HK) fell more than 5% and 3.1% respectively after the report.

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The proposals under consideration include a direct privatization or a relocation of shares in Hong Kong followed by a delisting from the US, according to the news report.

If privatization continues, shareholders are likely to be offered at least $ 14 per share in the first share price, as a lower offer so soon after the June listing could lead to lawsuits or opposition to shareholders, the report said, citing sources.

Since Wednesday’s closing, Didi’s shares have fallen 42% to $ 8.11 since being listed in June.

The company clashed with Chinese authorities when it pushed for listing in New York, despite the regulator urging it to put it on hold while a cybersecurity review of computer practices was conducted, sources told Reuters.

Shortly afterwards, CAC launched an investigation into Didi’s collection and use of personal information. It said data had been collected illegally and ordered app stores to remove 25 mobile apps run by Didi.

Didi responded at the time by saying that they had stopped registering new users and would make changes to comply with rules on national security and the use of personal data and would protect users’ rights.

China’s technology giants are under intense state scrutiny over antimonopoly behavior and handling of their vast consumer data, while the government tries to curb their dominance after years of unbridled growth.

SoftBank Vision Fund owns 21.5% of Didi, followed by Uber Technologies Inc (UBER.N) with 12.8% and Tencents 6.8%, according to a June submission from Didi.

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Reporting by Brenda Goh in Shanghai and Sneha Bhowmik in Bengaluru; Editing by Arun Koyyur and Sam Holmes

Our standards: Thomson Reuters Trust Principles.



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