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Diddy, who has succumbed to Chinese regulators, plans to delist from New York months after Reuters debut.

© Reuters. File Photo: On July 5, 2021, at its headquarters in Beijing, China, there are signs of Didi, a Chinese ride-hailing service. REUTERS / Tingshu Wang

Julie Zhu and Kane Wu

Hong Kong (Reuters)-Ride Hailing giant Diddy Global has announced that it will be unlisted from the New York Stock Exchange just five months after its debut and will pursue a listing in Hong Kong-USIPO is pending.

Diddy pushed for a $ 4.4 billion initial public offering in the United States, despite being asked to put it on hold during a review of data practices.

The powerful China Cyberspace Administration () has ordered the app store to immediately remove 25 Diddy mobile apps and has the company stop registering new users for national security and public interest reasons. I instructed. Diddy is under investigation.

“As a result of careful investigation, the company will soon begin delisting on the New York Stock Exchange and preparing to go public in Hong Kong,” Diddy said in a Weibo account like Twitter.

The reason for the plan was not explained, but another statement said it would organize a shareholder vote at the right time.

Support for Diddy’s listing in New York is likely to be a difficult and cumbersome process, but it demonstrates both the immense influence of Chinese regulators and the bold approach to exercising it. Billionaire Jack Ma also rebelled against Chinese authorities, and last year the Ant Group’s mega IPO collapsed dramatically.

It may also further discourage Chinese companies from listing in the United States and encourage them to reconsider their position as a listed company in the United States.

“China’s ADR faces increasing regulatory challenges from both US and Chinese authorities. For most companies, it’s like walking on eggshells to please both. Abolition only makes things easier, “said Wang Qi, CEO of MegaTrust Investment’s fund manager. (HK).

Chinese regulators have pressured Diddy executives to devise plans to delist from the New York Stock Exchange because of data security concerns, sources told Reuters.

However, listing in Hong Kong can be complicated.

One of the key challenges is securities trading, given that only 20% to 30% of the company’s core ride-hailing services business in China is fully compliant with regulations that require three permits. Whether or not the exchange approves.

Sources who were not allowed to talk to the media and refused to be identified added that this was a major obstacle to companies previously conducting an IPO in Hong Kong.

Diddy didn’t immediately respond to Reuters’ request for comment.

Sources also told Reuters that Diddy is preparing to restart the app in China by the end of the year in anticipation that Beijing’s cybersecurity investigation will be completed by then.

The CAC did not immediately respond to requests for comment on Diddy’s plans to delist from New York.

Diddy made its debut in New York on June 30 for $ 14 per American Depositary Receipt. This resulted in a $ 67.5 billion valuation on an undiluted basis. Since then, these stocks have fallen 44% to Thursday’s closing price at $ 37.6 billion.

Shares of SoftBank Group Corporation, an investor in Didi, fell 2% after the announcement of DiDi. This was also hit by the slump in Southeast Asia’s ride hailing giant Grab’s Nasdaq debut.

According to June’s Didi, SoftBank Vision Fund owns 21.5% of Didi, followed by Uber Technologies (NYSE :) Inc, which owns 12.8%.

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Diddy, who has succumbed to Chinese regulators, plans to delist from New York months after Reuters debut.

Source link Diddy, who has succumbed to Chinese regulators, plans to delist from New York months after Reuters debut.

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