On Wednesday, China’s ride-hailing giant Didi urged US investors to vote yes on delisting its shares from New York. Didi said it can’t pursue a new listing as it faces a cybersecurity review launched last July by Chinese regulators, which still has no clear end in sight. 

Why it matters: The company said in a filing to the US’s Securities and Exchange Commission (SEC) that the completion of Beijing’s cybersecurity review is “a prerequisite” for seeking approval for another listing, which implies a further delay for Didi’s plan to list in Hong Kong instead.

Details: Didi will only be able to complete a cybersecurity review on the condition that the company removes itself from the New York Stock Exchange, according to the filing.

  • A settlement with the Chinese regulators is also a must for Didi to resume “normal” operations, including getting its apps back onto domestic app stores and having access to new users, which will benefit shareholders, the company said.
  • The Chinese ride-hailing company said it remains unsure whether its rectification program will comply with local laws and when its business can return to normal. A shareholder meeting will be held on May 23 to vote on Didi’s proposed delisting from New York.

Context: Didi initially announced plans to delist from the  US and seek a new Hong Kong listing back in December. But the company had halted the process when it failed to meet the requirements on data security compliance, a March statement confirmed.

  • Didi’s losses more than doubled in 2021 to RMB 19.1 billion, while revenue grew by only 22.6% compared to the previous year to RMB 173.8 billion. The company has lost a massive $60 billion in market capitalization 10 months after it made its public debut in New York. 
  • The Chinese government launched a cybersecurity investigation into Didi over alleged data security concerns last July, immediately after its $4.4 billion US IPO, and has since neither disclosed any results nor lifted its ban on the company’s services on local app stores.

Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: jill.shen@technode.com or Twitter: @jill_shen_sh