China's regulators ask Didi to delist from the New York Stock Exchange

The country’s tech watchdog wants management to take the company off the New York Stock Exchange because of concerns about leakage of sensitive data. The Cyberspace Administration of China, the agency responsible for data security in the country, has directed Didi to work out precise details, subject to government approval.

Proposals under consideration include a straight-up privatisation or a share float in Hong Kong followed by a delisting from the US. Didi caught the attention of Beijing when it proceeded with its New York stock offering in the summer of 2021, despite regulatory requests that it ensures the security of its data before the IPO. Chinese regulators quickly launched multiple investigations into the company and have considered a range of unprecedented penalties, Bloomberg News reported in July 2021.

Beijing’s municipal government has proposed an investment in the company that would give state-run firms effective control, Bloomberg News reported in September 2021. Such an investment could help Didi finance the repurchase of its US-traded shares. SoftBank and Uber Technologies are Didi’s biggest minority shareholders.

Even if Didi shifts its listing to Hong Kong, it will have to address the data security concerns that have drawn regulatory scrutiny and may have to give up control of its data to a third-party. A withdrawal from US bourses could bring fears of a migration of Chinese firms as Washington and Beijing quarrel about access to listed firms’ books.