The US Securities and Exchange Commission (SEC) is investigating Didi Global Inc’s (滴滴) chaotic debut in New York last year, when the ride-hailing giant raised US$4.4 billion days before revelations of a Chinese probe into data security tanked the stock.
Didi’s shares slid 7 percent in extended trading, deepening an 85 percent loss since its initial public offering (IPO) in the summer of last year.
US lawmakers had last year called for an investigation into Didi’s controversial IPO — the biggest by a Chinese firm since Alibaba Group Holding Ltd (阿里巴巴).
Photo: Reuters
The Cyberspace Administration of China (CAC), Beijing’s cybersecurity watchdog, stunned investors by announcing its investigation into Didi two days after the listing, suspending the Internet giant’s main apps from domestic stores.
That precipitated a flurry of regulatory action against gig-economy and Internet companies, culminating in a decision to force Didi to delist from New York and float in Hong Kong instead.
It is unclear when the SEC launched its own probe into the matter. Didi devoted just a few lines on the US investigation well into a 170-plus-page regular filing on Monday.
“After our initial public offering in the United States, the SEC contacted us and made inquiries in relation to the offering,” the filing read. “We are cooperating with the investigation, subject to strict compliance with applicable PRC [People’s Republic of China] laws and regulations. We cannot predict the timing, outcome or consequences of such an investigation.”
Didi last month said that it had not applied to move to another exchange, surprising investors who anticipated a smoother transition.
Beijing officials told the CAC that they were not satisfied with the proposed punishments and asked for revisions, people familiar with the matter said.
Didi shareholders are to vote on its delisting at a special meeting on May 23.
In related news, the US is moving toward imposing sanctions on Chinese video surveillance company Hikvision Digital Technology Co (海康威視數字技術), the Financial Times (FT) reported yesterday, citing four people familiar with the talks.
US President Joe Biden’s administration is considering placing human rights-related sanctions on the Chinese company, the FT reported.
The sanctions, if enforced, could have dire consequences for the maker of surveillance equipment, which was added to a list of firms threatening US national security.
Washington has begun briefing allies, given that Hikvision has customers in more than 180 countries, two of the sources told the FT.
The Federal Communications Commission had in March last year designated five Chinese companies, including Hikvision, as posing a threat to national security under a 2019 law aimed at protecting US communications networks.
China’s Huawei Technologies Co (華為), ZTE Corp (中興通訊), Hytera Communications Corp (海能達通訊) and Zhejiang Dahua Technology Co (大華技術) were also on the list.
Additional reporting by Reuters
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