China asks ride hailing giant Didi to create plan to delist

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China asks ride hailing giant Didi to create plan to delist

Chinese regulators have asked top executives of ride hailing giant Didi Global Inc to create a plan to delist from the New York Stock Exchange due to concerns about data security, according to Bloomberg News.

The report said that the management of China wants to take the company off the US bourse because of concerns about leakage of sensitive data.

Neither Didi nor the Cyberspace Administration of China responded to Reuters' requests for comment. After the report, Shares in Didi investors SoftBank Group Corp and Tencent Holdings fell more than 5% and 3.1%.

According to the news report, proposals include a straight-up privatization or a share float in Hong Kong and a delisting from the United States.

The report said that if the privatization proceeds, shareholders would likely get at least the $14 per share initial public offering price, since a lower offer so soon after the June IPO could cause lawsuits or shareholder resistance.

Didi's shares have fallen 42% since it went public in June, to $8.11 as of Wednesday's close.

The company ran afoul of Chinese authorities when it pressed ahead with its New York listing, despite the regulator urging it to put it on hold while a cybersecurity review of its data practices was conducted, sources told Reuters.

The CAC launched an investigation into Didi's use of personal data. The data had been collected illegally, and ordered app stores to remove 25 mobile apps operated by Didi.

Didi said at the time that it had stopped registering new users and would make changes to comply with rules on national security and personal data usage, and would protect users' rights.

China's tech giants are under intense state scrutiny over anti-monopolistic behavior and handling of their vast consumer data, as the government attempts to rein in control after years of unfettered growth.

According to Didi's filing in June, SoftBank Vision Fund owns 21.5% of Didi, followed by Uber Technologies Inc with 12.8% and Tencent's 6.8%.