China’s Didi to leave US stock market amid tech crackdown
BEIJING: China’s dominant ride-hailing service, Didi Global Inc., has said it will pull out of the New York Stock Exchange and shift its share trading to Hong Kong as the ruling Communist Party tightens control over tech industries.
Didi gave no explanation, but China’s leaders increasingly fret about who controls information gathered about its public by e-commerce, ride-hailing and other tech companies. Beijing sees that as a valuable asset and security risk.
Regulators said in July they would step up scrutiny of tech companies with shares traded abroad and their information security and cross-border data flows.
Didi’s share price fell 25 per cent after regulators launched an investigation into its handling of customer data following its June 30 stock market debut.
“After conscientious research, the company will start delisting operations on the New York Stock Exchange immediately and commence preparations to list in Hong Kong, Didi said on its social media account on Friday.
A separate statement said U.S. shares would be converted into freely tradable shares on another internationally recognised” exchange.
Hong Kong is Chinese territory but has a separate regulatory system that allows foreigners to invest in its stock market. Mainland markets are mostly off-limits to foreign capital. Tech entrepreneurs who are largely shut out of the state-run financial system have raised billions of dollars abroad. But the ruling party worries about how that affects control of their companies. It is promising more access to capital within China.
Didi Chuxing raised about $4.4 billion in its market debut. The company earlier denied a news report it planned to buy back its U.S. shares.
Other companies including Alibaba Group, the world’s biggest e-commerce company, and Tencent Holding, which operates the popular WeChat message service, also have been hit by data security and antimonopoly probes.
Investor jitters about the crackdown have knocked more than $1 trillion off the total market value of Chinese tech companies on US and other foreign exchanges.