China orders country’s biggest ride-hailing service, Didi, be delisted from U.S

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China’s regulators have invited Didi’s executives to devise a plan to delist from the U.S.

According to Bloomberg, regulators said they want Didi to be delisted from the New York Stock Exchange due to concerns about sensitive data leakage, as people familiar with the matter have asked not to be identified by the news agency, due to the sensitivity of the matter.

The American media company also reported that Didi has been asked by China’s Cyberspace Administration to work out delisting details that will require government approval. After delisting in the United States, Didi could either go for a privatization or a Hong Kong listing, the report stated.

A privatization would involve the $14 per share listing price, while a Hong Kong float likely would not be at the same price as Didi’s shares traded in the U.S.

On Friday in Asia, SoftBank shares were down nearly 5%. Didi is owned by more than 20% of SoftBank’s Vision Fund following its listing in the U.S.

It would be unprecedented for a state to delist companies in this manner, but it shows that Beijing is committed to reigning in tech giants and tightening up regulation. Didi stands out in this respect. As soon as the company went public in June, regulators began reviewing its cybersecurity practices.

The authorities were reportedly furious that Didi moved forward with its IPO without resolving cybersecurity issues they wanted resolved. Despite being China’s largest ride-hailing app, Didi holds a lot of data about travel routes and users.

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Didi may have been delisted as part of a package of punishments. As media sources reported in September that Beijing plans to invest in the company, giving state-owned firms effective control. It could help Didi repurchase its shares listed on the U.S. stock exchange.

It has now become a test case for a broader Chinese effort to limit the power of internet titans as Didi, once feted for defeating Uber in China, has done.

With President Xi Jinping’s administration keen to promote the idea of “common prosperity,” the government has targeted the internet sector, which has accumulated vast wealth operating outside the law, generating unprecedented numbers of billionaires, and enriching local and foreign investors alike.

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