Chinese regulators asked Didi Global Inc. as early as three months ago to delay its landmark US initial public offering because of national security concerns involving its huge trove of data, according to people familiar with the matter.
The message was conveyed in meetings between the ride-hailing giant and regulators including the Cyberspace Administration of China, the people said, asking not to be identified discussing a sensitive matter. The Wall Street Journal reported earlier that officials were worried about Didi’s data potentially falling into foreign hands as a result of the greater public disclosure associated with a US listing.
Didi ultimately went ahead with the offering, raising US$4.4 billion in the second-largest debut by a Chinese corporation in US history. Two days later, the watchdog announced a cybersecurity probe of the firm and banned it from adding new users. The clampdown, which also ensnared two other Chinese tech companies that recently listed in the U.S., raises questions about what Didi knew of regulators’ intentions before the IPO and whether it should have been more forthcoming in disclosures to investors. Didi’s shares plummeted 28% in the US pre-market Tuesday, July 6, as traders returned after a long break.
