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China Asks Didi To Delist From U.S. On Data Security Fears

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The Chinese tech watchdog wants Didi Global management to remove the company from the U.S. stock exchange over fears of sensitive data being leaked, the report said, citing people familiar with the matter.


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Proposals under consideration include direct privatization or float of shares in Hong Kong

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Chinese regulators have asked senior executives at ride-sharing giant Didi Global Inc to work out a plan to delist from the New York Stock Exchange over data security concerns, Bloomberg News reported. The Chinese tech watchdog wants management to remove the company from the U.S. stock exchange over fears of sensitive data being leaked, the report said, citing people familiar with the matter. Neither Didi nor the Cyberspace Administration of China responded to Reuters requests for comment. Shares of investors Didi SoftBank Group Corp and Tencent Holdings fell more than 5% and 3.1%, respectively, as a result of the report.

The proposals under consideration include a direct privatization or a float of shares in Hong Kong followed by a delisting of the United States, according to the report. If privatization continues, shareholders will likely be offered at least the initial public offering price of $ 14 per share, as a lower bid so soon after the June IPO could lead to lawsuits or resistance. of shareholders, according to the report, citing sources. As of Wednesday’s close, Didi’s shares have fallen 42% to $ 8.11 since its IPO in June.

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SoftBank Vision Fund owns 21.5% of Didi, followed by Uber Technologies Inc with 12.8% and Tencent 6.8%, according to a file filed in June by Didi.

The company clashed with Chinese authorities when it continued listing in New York, despite the regulator urging it to suspend it while a cybersecurity review of its data practices was being conducted. sources told Reuters. Shortly thereafter, the CAC launched an investigation into Didi for his collection and use of personal data. He said the data was collected illegally and ordered app stores to remove 25 mobile apps operated by Didi.

Didi responded at the time by saying that he had stopped registering new users and would make changes to comply with rules on national security and the use of personal data and protect user rights. Chinese tech giants come under state scrutiny over anti-monopoly behavior and handling of their vast consumer data, as government tries to curb their dominance after years of growth unimpeded. SoftBank Vision Fund owns 21.5% of Didi, followed by Uber Technologies Inc with 12.8% and Tencent 6.8%, according to a file filed in June by Didi.

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