Didi’s regulatory nightmare in China may be almost over.
According to Wall Street Journal This Monday (6), citing unnamed sources, Beijing’s cybersecurity review of the urban transport giant is about to end.
The move could make Didi, which owns 99 in Brazil, return to app stores in mainland China, potentially as early as this week.
The article, which comes nearly a year after the company was hit by regulators and had its app banned in China, sent its New York shares up 53% in premarket trading on Monday.
Didi isn’t the only company said to be out of the woods.
Two other US-listed Chinese companies – logistics provider Full Truck Alliance and online recruitment platform Kanzhun – are also nearing the end of their respective data security investigations and will have access to the restored app stores as well, according to the report. Newspaper.
Shares of these companies rose 27% and 21% in premarket trading on Monday, respectively. Didi, Full Truck Alliance and Kanzhun did not immediately respond to a request for comment.
Completion of the cybersecurity review comes too late to save Didi from an embarrassing Wall Street pullout just a year after listing, and will have more consequences for the company.
All three companies are likely to be fined, with the highest charge against Didi, sources told the paper.
They are also expected to hand over 1% of the capital to Chinese authorities, giving the government an official role in decisions, according to the paper.
end of a chapter
The news caps a dramatic year for what was once one of China’s most celebrated and valued companies.
Didi launched a highly successful initial public offering in the United States last June, raising $4.4 billion.
But just a few days later, Chinese authorities banned the service of app stores in the country and started the cybersecurity investigation. This turned the company into the face of Beijing’s crackdown on tech companies and prevented it from registering new users.
Since then, nearly 90% of its market value has been wiped out, dropping from nearly $70 billion a year ago to around $9 billion now.
Didi said last December that he would leave the US stock market, without giving a reason.
The move was widely seen as an attempt to appease Chinese officials who were unhappy with the way the action was publicized abroad.
Last month, shareholders voted to proceed with the withdrawal after the company said regulators would not be able to complete their investigation while it remained listed on Wall Street.
The company plans to list its shares in Hong Kong, but has not set a specific timetable.
Didi is also facing scrutiny in the United States. Earlier this month, she disclosed that she was being investigated by the Securities and Exchange Commission (SEC) for the failed IPO.
Source: CNN Brasil
