Economy

Didi, a Chinese app company, is planning to leave the US stock market and relocate to Hong Kong

Since its June debut in the United States, the company has been under intense scrutiny.

Beijing announced a crackdown on technology companies that list overseas just days after their initial public offering (IPO).

The US Securities and Exchange Commission (SEC) announced tough new rules for Chinese companies that list in the United States earlier on Thursday.

The company said on Weibo, China’s Twitter-like microblogging network, that “following careful research, the company will immediately begin delisting from the New York stock exchange and begin preparations for listing in Hong Kong.”

Didi said in a separate English-language statement that its board had approved the move, and that “at an appropriate time in the future, the company will organise a shareholders meeting to vote on the above matter, following necessary procedures.”

Didi, China’s answer to Uber, raised $4.4 billion (£3.3 billion) in its New York IPO at the end of June.

However, investors weighed concerns about tensions between Washington and Beijing, as well as issues raised by US regulators over some Chinese firms’ financial reports, on the first day of trading.

Within days, China’s internet regulator ordered online stores to stop selling Didi’s app, claiming that it illegally collected personal data from users.

The Chinese Cyberspace Administration (CAC) said it was looking into the company to safeguard “national security and the public interest.”

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“The company will strive to rectify any problems, improve its risk prevention awareness and technological capabilities, protect users’ privacy and data security, and continue to provide secure and convenient services to its users,” Didi said in a statement in response.

Didi also stated that removing its app from Chinese app stores would have a negative impact on revenue.

Regulators in the United States and Europe have put pressure on Didi, as they have on many other Chinese technology companies.

The US Securities and Exchange Commission announced on Thursday that it had finalised rules that will allow US-listed foreign companies to be delisted if their auditors do not comply with regulators’ requests for information.

After Chinese regulators repeatedly denied requests from US authorities to inspect the accounts of Chinese firms that list and trade in the US, the law was passed in 2020.

It had intended to launch services throughout Western Europe, including major British cities.

With a stake of more than 20% in Didi, Japan’s SoftBank is the company’s largest single investor. Alibaba and Tencent, two Chinese technology behemoths, are also on board.

As a result of Didi’s acquisition of Uber China in 2016, Uber now owns a stake in the company.

Since debuting on the New York Stock Exchange, Didi Global shares have lost more than 40% of their value.

Chinese technology companies, from Alibaba to Tencent, have been scrutinised both at home and abroad.

For months, China’s ride-hailing behemoth Didi has been at odds with Chinese regulators.

Beijing removed Didi from app stores just a few days after the company went public on Wall Street in late June, accusing it of violating a data security rule, which surprised investors.

In an effort to support the sector’s growth, Beijing has also announced rules to protect the rights of millions of ride-hailing drivers.

However, American regulators have been keeping a close eye on Chinese businesses.

Didi announced that it is planning to list in Hong Kong, and that shareholders of its US-listed shares will be able to transfer their holdings to another stock exchange.

By the end of the year, the company plans to relaunch its apps in China.

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