Didi Global, China ride-hailing giant, reveals it faces an SEC probe about its NYSE IPO, on top of Beijing’s scrutiny and looming delisting
- Didi revealed in its annual report filed on Tuesday that it faces a probe by the US stock-market watchdog about its US$4.4 billion initial public offering last summer
- The revelation comes amid a China cybersecurity investigation and as the company hit a snag in seeking a new IPO host following a proposed delisting
Didi Global, the Chinese taxi-hailing giant already under cybersecurity investigation by Chinese authorities, revealed in its annual report filed on Tuesday that it also faces a probe by the US stock market watchdog about its US$4.4 billion initial public offering (IPO) in New York last summer.
The company, parent of Didi Chuxing, said in its annual report that the US Securities and Exchange Commission “contacted us and made inquiries” about its IPO on the New York Stock Exchange. The company did not provide details about the nature of the inquiries.
“We are cooperating with the investigation, subject to strict compliance with applicable [Chinese] laws and regulations,” the company said. “We cannot predict the timing, outcome or consequences of such an investigation.”
The revelation of the US probe comes during an ongoing cybersecurity review of the company’s operations by Chinese authorities. The company was put under cybersecurity probe two days after its New York IPO, and dozens of its apps have been absent from China app stores since July 2021. The investigation focuses on violations in collecting personal information.
The Post reported earlier that Didi Global’s search for an alternative stock-market home following its proposed exit from the NYSE has hit a snag, as its plan for an IPO in Hong Kong is on hold indefinitely. This setback puts Didi’s investors in a bind, as they prepare to vote on May 23 on the proposal by China’s dominant ride-hailing company to “voluntarily” delist from New York.
The China Securities Regulatory Commission, the securities watchdog, said earlier the delisting of Didi is an individual case and will not affect other Chinese companies listed in the US.
In its annual report, Didi Global said it has “no information on whether or when the prohibition on the download of our apps will be lifted or to measure [sic] how much of an impact it ultimately will have on our financial and operating performance”.
Separately, Didi said the company and some of its executives and directors have been sued in several class lawsuits in New York and California over allegations of misstatements and omissions in its IPO papers.
“Both the consolidated federal action and the state court action remain in their preliminary stages,” the company said in its annual report. “We intend to vigorously defend ourselves against these claims.”
The fate of Didi is widely watched as it is the first case of a cybersecurity probe into a US-listed Chinese company. During the probe, China has tightened its screening of overseas IPOs by requiring a cybersecurity review for any company going public abroad with the data of at least 1 million Chinese customers.
Didi’s stock price closed on Tuesday at US$2.01, a fraction of its IPO price of US$14.
Didi executives have remained out of public view since its IPO. In the latest development, Jean Liu Qing, president of ride-hailing giant Didi Chuxing, has hidden her social-media posts on the microblogging platform Weibo.
Author: Cheryl Heng, SCMP