Didi global has come under intense pressure since its US launch in June. Beijing announced a crackdown on tech companies listing overseas. Earlier on Thursday, the US market watchdog revealed tighter rules for Chinese firms that list in America.
The company will start delisting on the NYSE immediately and, with careful research, start preparing for listing in Hong Kong, the company’s statement on Weibo, a microblogging network of Twitter, read.
In a different statement, Didi announced that the board approved of the move and added that the company would organize a shareholders meeting to vote on the matter at a right time in the future according to necessary procedures.
Didi and China’s reply to Uber raised $4.4bn (£3.3bn) in its New York IPO.
Regardless, the investors were weighing concerns over tensions between Washington and Beijing and issues raised by US regulators over financial reports of some Chinese firms, which muted trading on the first day.
China’s internet regulator ordered online stores to not offer Didi’s app within days, arguing that it had illegally collected users’ personal data.
In the Cyberspace Administration of China’s defense, they wanted to protect “national security and the public interest.”
Didi, in its response, stated that the company would strive to correct any problems, enhance its risk prevention awareness and technological advancements, protect users’ privacy and data security, and go on to offer secure and convenient services to its users. Didi further warned that removing its app from Chinese stores would adversely affect its revenues.
Like most other Chinese tech companies, Didi has been pressured by US and European regulators.
On Thursday, the US SEC said it finalized rules meaning US-listed foreign companies can be delisted in the event that their auditors fail to comply with requests for information from regulators.
The law was passed in 2020, followed by the Chinese regulators insistently disproving requests from US authorities to analyze Chinese firms trading and listed in the US.
Meanwhile, a company source informed the BBC that it had postponed the plans to launch in the UK and continental Europe.
It had plans to launch services in Western Europe, including major British cities.
SoftBank of Japan is the most significant single investor of Didi, with more than a 20% stake. In addition, it is backed by Alibaba and Tencent, the Chinese technology giants.
After Didi took over Uber China in 2016, Uber also owned a stake in the firm. Didi Global shares have lost about 40% of their value since their US market debut.
All these Chinese technology companies have been scrutinized in the country and abroad.
Didi has been at odds with regulators for months now. So investors were surprised when Beijing cut Didi out from app stores for violating data security rules just days after the firm went public on Wall Street in late June.
Beijing has also revealed rules to protect the rights of the millions of ride-hailing drivers to underpin the sector’s growth.
American regulators, too, are watching Chinese companies closely. Didi stated that it is preparing to list in Hong Kong, and shareholders of its US-listed shares can convert their holdings to the ones on another stock exchange.
The company is also looking at relaunching apps in China by the year-end.