Ride-hailing platform Didi said Friday it had started the process of leaving the New York Stock Exchange (NYSE).
It comes just five months after its debut and follows massive pressure from Chinese regulators.
“Following careful research, the company will immediately start delisting on the New York stock exchange and start preparations for listing in Hong Kong,” the company said on its account on Weibo.
It will transform its NYSE shares into “freely tradable shares” that can be bought and sold elsewhere.
Why did China not want Didi on the NYSE?
Didi has dominated China’s ride-hailing market after buying out Uber China in 2016. With a market cap of $36.8 billion (€32.6 billion), it is now roughly one-half the size of Uber. However, it boasts 15 million drivers to Uber’s 3 to 4 million worldwide.
The Chinese company reportedly prompted regulators’ anger by pushing ahead with its NYSE listing in June this year and ignoring Beijing’s data security concerns.
China is worried that the US might order companies listed on the NYSE to reveal sensitive data. The US has adopted a new rule that compels Chinese firms to disclose if they are “owned or controlled” by the government.
Didi was “advised by Chinese regulators to get listed in Hong Kong rather than New York due to data security issues”, Angela Zhang, associate professor of law at the University of Hong Kong, told the AFP news agency.
“However, Didi didn’t listen and went ahead anyway, so the regulators taught the firm a hard lesson.”
From now on, “all Chinese tech firms will take data security issues seriously,” she added.
China, Didi and big tech
Just days after Didi’s NYSE debut, the powerful Cyberspace Administration of China (CAC) ordered app stores to take down the company’s app over “serious violations” in collecting and using personal information. According to reports, Didi already faces an anti-trust probe and the platform was banned from registering new users.
At the time, Didi made it clear it would fully comply with the instructions from the state. But the pressure continued in the coming months.
The Chinese government seems determined to break the rising power of its tech giants by applying steep anti-monopoly fines, ending tax breaks, and limiting the companies’ sales to minors.
dj/rt (Reuters, AFP, dpa, AP)
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