Didi withdraws its listing in the United States in favor of Hong Kong

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China-based ridesharing group Didi Global will ultimately not be listed in the United States, but instead in Hong Kong, the company said on Thursday (December 2nd).

The statement said the company’s board of directors supports this course of action, adding that Didi “will hold a shareholders’ meeting to vote on the above matter at an appropriate time in the future, following the necessary procedures.

Didi has been running into trouble lately, writes PYMNTS, as Chinese public investors chose to put money into rival company Cao Cao Mobility.

Didi’s struggles included a ban on registering new users, while regulators investigated the security of the company’s data. Regulators have taken a closer look at the activities of ridesharing companies, with Didi and its competitor Meituan falling within this scope.

However, the situation was different from what it was a few years ago. At that time, Didi was seen as an almost invincible business, with rivals often uncomfortable with capital. All of that changed when the government started looking at regulatory issues with Didi.

In September 2021, Cao Cao said the company had secured $ 588 million from an investor group in the eastern city of Suzhou, and planned to use the funds for further expansion and new innovations to make the safer drivers.

PYMNTS wrote that Cao Cao had reaped the rewards of negative reactions to Didi, with many investors seeking a domestic rival for the ailing company.

Read more: Amid regulatory pressure from Didi, China invests in rival mobility platform

PYMNTS reports that China has changed its rules on increasing overseas investment, preventing companies from making an initial public offering (IPO) on foreign stock markets with variable interest entities.

It comes after the China Securities Regulatory Commission (CSRC) made it impossible for tech companies to list in overseas markets from last August. The reasoning was sensitive data – with companies that don’t collect data, like drug companies, likely being given the green light to register overseas.

In addition, China is setting up an inter-ministerial council to approve public listings in foreign markets.

See also: China to ban overseas IPOs

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