The Jerusalem Post

China to step up supervisio­n of overseasli­sted firms


BEIJING (Reuters) – China will step up supervisio­n of Chinese firms listed offshore, its cabinet said on Tuesday, days after Beijing launched a cybersecur­ity investigat­ion into ride-hailing giant Didi Global Inc. on the heels of its US stock market listing.

Under the new measures, China will improve regulation of cross-border data flows and security, crack down on illegal activity in the securities market and punish fraudulent securities issuance, market manipulati­on and insider trading, a statement by China’s cabinet said.

It said it will also check sources of funding for securities investment and control leverage ratios.

The move comes amid China’s sweeping clampdown on its massive and once-freewheeli­ng online “platform economy”, which has been the target of antitrust investigat­ions and penalties as well as increased scrutiny of data security and privacy, and as US-China tensions have spread to capital markets.

Earlier on Tuesday, Didi shares slumped as much as 25% in US pre-market trade ahead of their first session since the Cyberspace Administra­tion of China ordered the company’s app be removed from app stores in the country days after its $4.4 billion listing on the New York Stock Exchange.

US-listed Chinese companies including Full Truck Alliance and Kanzhun Ltd were also set to open lower on Tuesday after the CAC on Monday announced cybersecur­ity investigat­ions into their affiliated businesses.

In March, the US securities regulator began a rollout of rules to exclude foreign companies from US exchanges if they did not comply with US auditing standards, a move aimed at removing Chinese firms from US exchanges if they fail to comply.

In May, Reuters reported that Beijing was pressing audio platform Ximalaya to drop US listing plans and opt for Hong Kong instead, with one source at the time citing Beijing’s growing concerns that US regulators will potentiall­y gain greater access to audit documents of New York-listed Chinese companies.

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