Didi shares fall after report China plans unprecedented penalties
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Chinese ride-hailing giant Didi came under renewed pressure on Thursday after a report reported that Beijing was considering harsh penalties ranging from a massive fine to a forced delisting following its IPO last month.
Didi’s shares fell more than 4% in pre-trading on Thursday after losing 18% this month. Bloomberg News reported that Chinese regulators are planning a series of penalties against Didi, including a fine likely higher than the record $ 2.8 billion Alibaba paid earlier this year.
The penalties could also include the suspension of certain operations, delisting or withdrawal of Didi’s U.S. shares, the report said, citing people familiar with the matter.
Didi stock has lost about 18% to $ 11.50 per share since it debuted on June 30th when it traded at $ 14 per share.
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Last week, officials from seven Chinese government agencies visited the ridesharing giant’s offices to conduct a cybersecurity clearance. The ride-hailing giant was forced to stop registering new users and its app was also removed from the Chinese app stores.
The Cyberspace Administration of China alleged that Didi illegally collected user data.
Beijing is stepping up its oversight of the spate of Chinese US stock market listings, most of which are tech companies. The State Council recently said in a statement that the rules of the “overseas listing system for domestic companies” will be updated while tightening restrictions on cross-border data flow and security.
– Click here to read the original Bloomberg News story.
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