China Rejects Didi Global’s New York Stock Exchange Listing, Requests Delisting
Amid China’s tight regulatory policies, its authorities have reportedly asked mobile transportation company Didi Global to delist from the New York Stock Exchange. The Chinese government made this request on the basis of security concerns, adding that the ride hailing giant could leak sensitive information.
In the latest development, China’s Cyberspace Administration has asked Didi to rescind its IPO Decision, requesting that the company devise a plan and work out details that will be beneficial to the Chinese government. This includes either floating its shares in Hong Kong following the delisting from the NYSE or privatization.
Rescinding The IPO Decision May Have Repercussion
Listing in the United States comes with benefits, as Didi’s IPO price will sell on the high. However, there would be repercussions if Didi bends to China’s request to delist from the NYSE.
Undoubtedly, one thing that may have influenced China’s move on Didi could be its feud with the United States. Over the past few years, the South East Asian nation and the United States have been on each other’s necks over regulations regarding some of its products being shipped to the North American nation.
China may be getting back at the US with its move on Didi Global. The Chinese Cyberspace Administration sees Didi’s IPO decision as a threat to the government, thus asking the company to go back on its decision.
Should Didi go ahead to delist from the NYSE and list in Hong Kong, Didi’s IPO price would go for at least half of the proposed $14 IPO price, almost at a discount. A lower offer so soon after its initial IPO in June could instigate lawsuits against the company, which Didi wouldn’t want at this time.
Summarily, any headwinds coming from the region are certain to have a setback. Reports reveal that shares in SoftBank Group Corp. fell over 5% in Tokyo.
Either of the proposals could mark a severe blow to Didi, a company that pulled off the largest IPO of any Chinese firm in the United States since Alibaba in 2014.
China Had Previously Launched Investigations into the Company
This isn’t the first time China has been involved with the mobile transportation company. In July, the regulators launched several investigations into the company, while incorporating several consequences.
China’s move against Didi was branded as “harsh” by many, considering that in December, Didi allowed its customers to make payments for its products using the digital Yuan. The news came after the company secured a strategic partnership with the Digital Research Institute of the PBoC.
Didi Global is yet to release a statement regarding China’s request, but it’s likely that the company will forge ahead with its IPO plan in the United States.
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