Didi, the Chinese ride-hailing giant that has undergone a year of a regulatory overhaul, faces a fine of more than 8 billion yuan ($1.28 billion) from the country’s authorities, The Wall Street Journal and Reuters reported.
The company did not immediately respond to a request for comment. Along with the fine, regulators will also allow Didi to reinstate its app to domestic app stores and proceed with its plan to list its shares on the Hong Kong Stock Exchange, according to the report. fox.
If the move comes to fruition, it could end a tumultuous year at SoftBank-backed Didi, once celebrated in China as a carpool lover.
The amount of the fine is not small, accounting for about 4.7% of Didi 174 billion yuan in last year’s revenue, but it can be seen as win-win, in which the authorities figure out who is in charge and Didi gradually return to business as usual, albeit under scrutiny. more than.
What happened to Didi?
Last July, the Chinese government launched a data security poll entered Didi just days after the company raised $4 billion from its first stock sale in New York. Regulators have also withdrawn their apps from Chinese app stores, saying it is “illegally collecting user data.”
Neither Didi nor the regulators made it clear what was “illegal,” but media reports and a memo viewed by TechCrunch indicate the company did not assure Beijing that its data operations were secure prior to going public in New York, which may involve sharing data with US regulators.
At the time, Didi was the largest mobile platform in China with over 500 million annual active users, which was real-name verified under the country’s laws, meaning the company had access to hundreds of millions of users. heaps of location data can be considered sensitive.
Didi has begun work on delisting from the New York Stock Exchange in December and by May, The deal is sealed. It is now moving to Hong Kong, which in recent years has attracted a slew of secondary listings of Chinese tech giants doing business in the US – AlibabaJD.com and Baidu, to name a few – as tensions between China and the US run high.
In recent months, the US has added dozens of Chinese technology companies, including giant Weibo microbloggingon a watchlist of companies that may be delisted if they fail to comply with the Securities and Exchange Commission’s audit requirements.
It’s unclear exactly how Didi has tackled its data security framework, but its experience should provide a playbook for other homegrown data tech companies pursuing innovative solutions. public investors outside of mainland China. Robotaxi Pony.ai, one of China’s most valuable startups, reported halted their SPAC plans in the US as it was facing similar cross-border data challenges.
