Chinese group Didi Chuqing withdraws from New York Stock Exchange under pressure from Beijing
The Chinese group Didi Chuqing, which is the equivalent of Uber in China, announced in a brief statement that it will withdraw from the New York Stock Exchange, where it has joined since the summer, on Friday, becoming a victim of competition between Beijing and Washington in the technology sector.
The group said in its statement that it "has begun, after careful consideration, a process of withdrawing from the New York Stock Exchange with immediate effect, and has begun preparations for an IPO on the Hong Kong Stock Exchange."
This constitutes a severe blow to shareholders, as the company lost, within 5 months, in the New York market, about 45% of its value.
Chinese start-ups were encouraged to take up IPOs in the United States for their own development.
In 2014, e-commerce giant Alibaba Group launched the largest-ever IPO on Wall Street, raising $25 billion.
But in an atmosphere of escalating confrontation with Washington, especially in the technology sector, Beijing is now encouraging Chinese start-ups to raise money on its stock exchanges (Hong Kong, Shanghai, Shenzhen or now Beijing).
Unlike many other Chinese companies, Didi kept its US IPO at the end of June. The group, which dominates the chauffeur-car booking market in its home country, has raised about 4.4 billion (3.7 billion euros).
But the operation angered Beijing, which fears the transmission of sensitive data to the United States. The Chinese authorities have opened an administrative investigation against Didi in connection with her collection of private data.
The Chinese authorities blocked the download of the company's application in an unprecedented measure against a large group of technology.
But the procedure didn't work because Didi users had already installed the app on their phones.
Angela Zhang, a specialist in Chinese law at the University of Hong Kong, told AFP that this decision was "not surprising" after the "hard lesson" that the Chinese authorities learned to control Didi's markets. "Now all Chinese technology companies will take data security issues seriously," she added.
The company's decision came hours after the United States adopted rules requiring stricter restrictions on foreign companies listed on the stock exchange.
The US Securities and Exchange Commission is now authorized to write off groups whose accounts are not audited by an approved company.
And companies in China and Hong Kong are known not to be subject to this procedure.
alroeya.com
