Hong Kong
CNN Business
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Didi says it’s dealing with an investigation by US regulators into its botched IPO final yr.
The Chinese ride-hailing large mentioned in a regulatory submitting this week that it’s cooperating with the investigation by the US Securities and Exchange Commission about its share providing, “subject to strict compliance with applicable [Chinese] laws and regulations.”
“We cannot predict the timing, outcome or consequences of such an investigation,” the corporate added.
Didi didn’t reply to a request for remark. A spokesperson for the SEC mentioned it doesn’t touch upon “the existence or nonexistence of a possible investigation.”
Didi launched a much-anticipated $4.4 billion preliminary public providing on the New York Stock Exchange on June 30, 2021, the most important US share providing by a Chinese agency since Alibaba’s blockbuster debut in 2014.
But days later, the Chinese authorities banned Didi from app shops within the nation and launched an investigation into its dealing with of buyer knowledge. Authorities from the highly effective Cyberspace Administration of China accused Didi of breaking privateness legal guidelines and posing cybersecurity dangers. Their actions had been additionally extensively seen as punishment for the corporate’s determination to go public abroad as an alternative of in China.
The drama was dangerous information for buyers: Didi’s shares crashed virtually 20% on the primary buying and selling day after the ban.
Since then, US regulators have taken a extra cautious method in the direction of Chinese IPOs: In July, the SEC informed its employees to ask for extra disclosures from Chinese firms searching for to go public within the United States earlier than it approves any plans for them to promote shares.
The regulatory crackdown hit Didi’s home enterprise. The firm reported a $4.7 billion loss for the third quarter of 2021. Its income dropped 1.7% from the identical interval a yr earlier.
Under strain from Chinese regulators, Didi introduced in December that it will begin the method of delisting from the NYSE and pivot to Hong Kong.
The firm will maintain a shareholder assembly on May 23 in Beijing to vote on the delisting plan, it mentioned in an announcement late final month.
Shares of Didi have misplaced 86% of their worth since its IPO final June.
— Paul R. La Monica contributed to this report.
