Timeline: how Didi went from poster child for China tech to cautionary tale of the risks incurred by defying Beijing

  • In July last year, China’s cyberspace watchdog initiated an unprecedented probe into Didi on the grounds of data security and ‘national security’
  • On top of the US$1.2 billion fine imposed on the company this month, Didi executives Will Cheng Wei and Jean Liu Qing were fined 1 million yuan each

China’s cyberspace regulator on Thursday imposed a fine of 8.026 billion yuan (US$1.2 billion) on Didi Global, the country’s ride-hailing giant, for violations of data laws, putting an end to a year-long investigation into the Beijing-based company.

Here is a timeline of how in the space of one year Didi went from being a poster child of China’s technology industry in the eyes of global investors to a cautionary tale of what can happen if a company gets on the wrong side of Beijing’s regulatory crackdown.

30/06/2021 – Didi launches a successful IPO in New York

Ahead of the 100th anniversary of the Chinese Communist Party, Didi raised US$4.4 billion from its New York IPO, valuing the company at about US$70 billion. Investors included SoftBank, Tencent Holdings, Post owner Alibaba Group Holding, Toyota Motor and Uber Technologies. The company had raised US$19.2 billion in multiple rounds of private-market fundraising since 2012.

However, Didi skipped the usual celebrations and public relations campaigns that went along with a successful mega-IPO, stirring murmurs.

02/07/2021 – China announces cybersecurity probe into Didi

The Cyberspace Administration of China (CAC) initiated an unprecedented probe into Didi on the grounds of data security and “national security”, shocking investors. Didi was ordered to stop registering new users on its main app. The company said it would “fully cooperate with the relevant government authorities during the review”.

04/07/2021 – Didi’s main app is removed from the app store

The CAC banned Didi’s main app from the country’s app stores indefinitely, saying it “seriously violated the country’s laws and regulations through the improper collection and usage of user information”.

09/07/2021 – Didi angers Beijing with ‘deliberate act of deceit’

The Post reported that Didi had angered Beijing by yang feng yin wei, or to comply publicly, but defy privately. A statement from CAC partly confirmed the report, as it used the same wording.

10/07/2021 – Dozens of Didi-related apps removed from app store

The CAC ordered more than two dozen additional apps tied to Didi to be banned from China’s app stores, alleging that they illegally collected user data. They include platforms catering to enterprise clients and freight movers, as well as apps tailored for Didi drivers, such as those used to manage dashcam footage.

The CAC also prohibited websites and platforms from providing links to Didi-related services. The 25 apps were ordered to “thoroughly rectify the existing problems in strict accordance with the requirements of the law and according to national standards”.

16/07/2021 – Government task force begins on-site investigation of Didi

A task force comprising representatives from seven Chinese ministries, including the CAC, the public security ministry and national security ministry, arrived at Didi’s offices to conduct the country’s first-ever cybersecurity review.

Other departments involved in the on-site inspection included the State Administration for Market Regulation (SAMR), the Ministry of Natural Resources, the Ministry of Transport, and the State Administration of Taxation.

29/07/2021 – Didi denies privatisation report

The Wall Street Journal reported that Didi was considering going private to placate authorities in China, and would compensate investors for losses incurred since the listing. Didi denied the report in a post on its official Weibo account, saying that it was “actively cooperating with cybersecurity reviews”.

06/08/2021 – Didi denies market reports of data transfer

Didi said on Weibo that market rumours that it transferred data rights to third parties, introduced new major shareholders, and was planning to delist, were false. ​​​​This was in response to Reuters reports saying that the company was in talks with state-owned information security firm Westone to handle its data management, and that it planned to bring in new shareholders or delist its shares.

04/09/2021 – Didi denies reports of Beijing-led investment

Didi denied media reports that the Beijing municipal government was leading a proposal to invest in the company, putting it under state control. Citing people familiar with the matter, Bloomberg News reported on September 3 that Shouqi Group – part of the influential Beijing Tourism Group – and other firms based in the nation’s capital would acquire a stake in Didi in the form of a “golden share”, with a board seat and veto power, under a preliminary proposal.

07/09/2021 – Didi sets up security committee

Didi’s founder and chief executive Cheng Wei heads a new Information and Data Security (IDS) committee at the firm, the Post reported. Chief technology officer Zhang Bo is the executive deputy director, marking a significant departure from the previous practice that saw the committee taking a supporting role.

21/09/2021 – Didi denies reports of co-founder Jean Liu leaving

Didi said a Reuters report that president Jean Liu was on her way out was false, and threatened legal action to fight the “malicious” spreading of rumours. Liu told close associates that she expected the government to take control of the ride-hailing giant and appoint new management, according to Reuters.

03/12/2021 – Didi announces plans to delist from New York

Didi said on its official Weibo account that it would “start the work of delisting from the NYSE and initiate preparation for listing in Hong Kong with immediate effect”.

12/01/2022 – Didi in talks for IPO in Hong Kong

The Post reported that Didi Global was in talks to launch an initial public offering (IPO) in Hong Kong in the second quarter, as it prepared to exit NYSE.

11/03/2022 – Didi puts Hong Kong listing plan on hold

Didi is said to have suspended preparations for its planned Hong Kong listing after failing to appease Chinese regulators’ demands that it overhaul its systems for handling sensitive user data, Bloomberg reported.

04/05/2022 – Didi faces SEC probe over New York IPO

Didi Global revealed in its annual report that it also faces a probe by the US stock market watchdog about its US$4.4 billion IPO in New York.

23/05/2022 – Didi shareholder meeting approves delisting plan

Didi Global received approval at a special shareholder meeting to “voluntarily” delist from the New York Stock Exchange, capping an 11-month fiasco that wiped out US$60 billion in value and turned the ride-hailing giant into a lesson on the risks of investing in Chinese tech stocks.

12/06/2022 – Didi shares start trading on over-the-counter market

Didi shares started trading on the over-the-counter market (OTC), two weeks after its shareholders voted to delist the company from the NYSE.

21/07/2022 – Regulator announces Didi fine and probe results

On top of US$1.2 billion fine imposed on the company, Didi executives Will Cheng Wei and Jean Liu Qing were fined 1 million yuan each. Didi said on its Weibo account that it fully accepted the regulator’s decision and would rectify its wrongdoings.

Author: Coco Feng, SCMP

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