Chinese Regulators To Fine Didi At Least $1 Billion To End Probe
After a punitive year-long investigation into Didi Global, China’s version of Uber, Beijing regulators are finally preparing to wrap up the investigation into the company’s cybersecurity practices by slapping it with a billion dollar fine, WSJ reported. The billion-dollar fine is equivalent to 4% of Didi’s $27.3 billion total sales last year.
More importantly, once the Cyberspace Administration of China (CAC) makes an official announcement, Didi restrictions will be eased, allowing the app to be restored on Chinese app stores and resume adding users to its platform. The resolution would enable Didi to pursue a new share listing in Hong Kong, according to the WSJ.
Didi is the highest profile company at the epicenter of Beijing’s crackdown on the technology industry initiated in 2020. Investors have been waiting about a year for CAC fines against the ride-hailing giant since a probe was opened in the summer of 2021 into potential data security violations.
Shares in Didi have plunged more than 80% since its listing on the NYSE last June.
CAC launched the investigation into Didi days after the NYSE listing. Didi delisted in June, telling shareholders it had to resolve CAC’s investigation. It has since been trading on the pink sheets under the symbol DIDIY.
A resolution to Didi’s troubles with CAC could be an inflection point for Chinese technology companies that have been beaten down over the last year amid the tech crackdown. It’s definitely positive news and a further sign that the regulators could be wrapping up the crackdown.
Tue, 07/19/2022 – 07:18