By Dhirendra Tripathi
Investing.com – DiDi Global Inc. ADR (NYSE:DIDI) plunged 13% in premarket Friday on a Bloomberg report that the Chinese ride-hailing firm has suspended the process for a Hong Kong market debut, putting a question mark over its plans to bring the listing closer home.
According to Bloomberg, the firm has failed to meet Cyberspace Administration of China’s demands of overhauling its systems for handling sensitive user data. Its main apps, removed from local app stores last year, will remain suspended for the time being.
The company had, in December, announced its plan to delist in the U.S. and pursue a listing in Hong Kong on landing under the cybersecurity probe in its home country. It had then said its NYSE-listed stock will be converted into tradable shares on another stock exchange.
News that the company had landed in the crosshairs of the Chinese regulators became public soon after its June 30 debut on NYSE, ensuring that the share has rarely traded above its issue price of $14. It closed at $3.38 Thursday.
According to a report in The Wall Street Journal, the company had been advised to delay its initial public offering, pending a review of its data-handling practices. The company ignored the advice, only to find itself in all sorts of legal troubles later.
As more and more Chinese companies have got listed on American exchanges over the last few years, authorities there have become increasingly uncomfortable with the vast trove of data they possess and that they may be asked to share with American regulators to comply with listing norms.
According to Bloomberg, DiDi has since explored several alternatives, including hiving off data to a third-party Chinese firm and selling a stake to state-backed companies.