Chinese regulators suggested ride-hailing giant DiDi Global Inc. delay its initial public offering in the United States weeks before its IPO, and urged it to conduct a thorough self-examination of its network security, the Wall Street Journal reported, citing people familiar with the matter.
However, in the absence of an outright order to halt the IPO and increasing investor pressure, the Chinese company went ahead with its decision to go public in the U.S.
As per the report, officials mainly at the Cyberspace Administration of China or CAC, remained wary of the chances of DiDi’s huge collection of data falling into foreign hands as part of the planned IPO.
Didi, which offers services in China and around 15 other markets, went public on the New York Stock Exchange on June 30 in the biggest US share offering in recent times. The listing reportedly raised about $4.4 billion, the biggest Chinese IPO since Alibaba Group Holding Ltd.’s IPO in 2014.
Meanwhile, two days after the company got listed in the U.S., Chinese cybersecurity watchdogs filed a security probe against the company related to national security and public interest. The company then stopped new user registration as the CAC investigation was going on.
Last Sunday, “DiDi Chuxing” app was also banned by Chinese regulator from app stores in the country for allegedly violating laws by illegally collecting and using personal information.
Once the “DiDi Chuxing” app is taken down from app stores in China, the app can no longer be downloaded in China. However, existing users who had previously downloaded and installed the app on their phones prior to the takedown may continue using it.
In response to CAC action, the mobility technology platform, which has around 377 million active users in China, said it expects that the app takedown may have an adverse impact on its revenue in China.
The company also said CAC required the company to strictly comply with relevant laws and regulations, follow the standards set by the PRC government authorities, and rectify the problem to ensure the security of users’ personal information.
Apart from the actions in China, DiDi maintains normal operations globally.
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