Didi Global to vote on US delisting next month, says no new listing plan before NYSE exit
Didi Global, the Chinese ride-hailing giant being investigated by Beijing for cybersecurity breaches, said it will hold a special shareholder meeting on May 23 to vote on its “voluntary” delisting in the United States.
The Beijing-based firm, which was put under investigation days after its US$4.4 billion initial public offering (IPO) on June 30 last year, said in a statement on Saturday that it will not apply for another listing on any other exchange before completing its delisting from the New York Stock Exchange. In a statement issued in December, it had said that it would delist from New York and pursue a listing in Hong Kong.
The planned delisting, uncertainties arising from its cybersecurity investigation and the lack of immediate prospects for a relisting, are set to deal a heavy blow to the company’s value – and could even undermine investor confidence in Chinese stocks.
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The China Securities Regulatory Commission, the country’s stock market watchdog, said in a statement immediately after Didi’s announcement that the ride-hailing firm’s delisting plan had nothing to do with other US-listed Chinese stocks and was not related to “the ongoing audit cooperation between China and the US”, in an apparent move to control any spillover damage from Didi’s statement.
According to the Didi statement, it must cooperate further with China’s cybersecurity regulators in the investigation and conduct rectifications.
Didi angered China’s cybersecurity authority by forcing its way to an IPO in the US without Beijing’s full consent, the Post reported earlier. As a result, government authorities led by the powerful Cyberspace Administration of China ordered app stores to remove 25 mobile apps operated by Didi and told the company to stop registering new users last summer on national security grounds.
A government task force, including delegates from China’s Ministry of Public Security and Ministry of State Security, entered Didi premises last July to carry out an investigation, but the task force has not published any findings or conclusions.
The firm reported total revenue of 40.8 billion yuan (US$6.4 billion) for the fourth quarter of 2021, a decline of 12.6 per cent when compared with the same period a year ago, Didi said in a separate statement.
Meanwhile, Tencent Holdings president Martin Lau Chi-ping has left Didi’s board of directors. He was replaced by Liang Fengxia, who is associate general counsel at Tencent.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.
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