Ride-hailing giant Didi could face hefty fines from Chinese regulators as well as possible delisting from the New York Stock Exchange (NYSE), CNBC reported on Thursday (July 21), citing sources.
Didi shares dropped over 8 percent and its month-to-date losses totaled more than 25 percent. Fines from Chinese regulators could exceed the historic $2.8 billion penalties levied against Alibaba this year. Didi’s punishment could also force the company to delist or withdraw its U.S. shares, according to the sources.
Since Didi went public on June 30, shares dropped 25 percent to $10.50 per share from its trading debut at $14 a share. Regulators forced the removal of Didi’s app from WeChat and Alipay and app stores.
Beijing recently ramped up efforts to oversee Chinese companies going public in the U.S. The State Council recently said that mandates for foreign listings will be revised and will include further restrictions on how data is shared cross-border.
Chinese regulators from seven different agencies descended on Didi’s headquarters last week to conduct an on-site cybersecurity review. Officials had already forced the deletion of Didi’s apps and the company was instructed not to sign any new users. The Cyberspace Administration of China said that Didi was illegally collecting data from its user base.
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