Investing.com – ADRs and stocks of several Chinese companies including Didi Global (NYSE:DIDI) and Meituan (OTC:MPNGY) traded lower Thursday as authorities in the country summoned 11 ride-hailing firms to tell them to rectify by December practices the government considers non-compliant.
ADRs of Didi and Meituan fell 1.4% and 3.5%, respectively.
As per Chinese regulators, the services are recruiting unapproved drivers and vehicles.
The action had a cascading effect on other Chinese listings, too. Pinduoduo (NASDAQ:PDD) fell 3%, Tencent (OTC:TCEHY) 1.2% and JD.com (NASDAQ:JD) 1.3%.
The Ministry of Transport, along with a number of other regulators including the Cyberspace Administration of China and State Administration of Market Supervision, jointly interviewed the companies.
A statement issued Thursday accused the companies of disrupting fair competition and hurting the interests of their stakeholders, namely drivers and passengers.
Regulators said that all platforms should have the necessary approvals for cars and drivers. They should not entice drivers to join through fake promotions or transfer any business risks to them, they said.
The regulators also ordered the companies to give drivers enough time to rest.