Didi reportedly halts IPO plans in Hong Kong

Chinese ride-hailing company Didi Chuxing will reportedly put its IPO plan in Hong Kong on hold as Chinese authorities remain unsatisfied with its handling of user data, according to a Bloomberg report. The report said the Cyberspace Administration of China (CAC) had told Didi's management that their proposals to prevent security and data leaks were insufficient. Moreover, the CAC could announce the outcome of the probe in the coming weeks.

Last month, it was also reported that Didi would reduce its overall headcount by 20% prior to its plan to transfer its stock from the US to Hong Kong, said a report from Bloomberg. The report said most of Didi's core business will be affected by the job cuts as it was aimed at reducing expenses ahead of the Hong Kong listing. Moreover, the company's core ride-hailing business may see staff reduction of as much as 15%. Drivers will not be affected as they are not officially included in the company's headcount. In addition to the plan, Didi has already lowered investments in community grocery buying. Other units such as Didi Finance, which is expanding outside China, and its autonomous driving business will be less impacted.

In December 2021, Didi said it was planning to delist from the US and enter the Hong Kong market. On its Weibo account, the company said that after meticulous study, it would start working on the delisting and kicking off the listing in Hong Kong. It offered no other information on Weibo. Moreover, on its website, it said, "The board of directors has authorised and supports the company to undertake the necessary procedures and file the relevant applications for the delisting of the company’s ADSs (American depositary share) from the New York Stock Exchange, while ensuring that ADSs will be convertible into freely tradable shares of the company on another internationally recognised stock exchange at the election of ADS holders."

In late November, Chinese regulators asked Didi's executives to work on a plan to delist from the US listing due to concerns around sensitive data leakage. It added that the company will "organise a shareholder meeting to vote on the above matter at an appropriate time in the future, following necessary procedures. The board has also authorised the company to pursue a listing of its class A ordinary shares on the main board of the Hong Kong Stock Exchange."

Didi had its IPO on 30 June 2021 in the US but soon after this, the Chinese government asked it to remove from app stores due to serious violations of Didi Global's collection and usage of personal information. Multiple reports said the CAC announced the ban after the IPO, just two days after the regulator said it was starting a cybersecurity review of the company. The authority said that it had ordered Didi Chuxing to rectify its problems following legal requirements and national standards, and take steps to protect the personal information of its users.

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