China’s Cyberspace Administration has fined Didi Global 8.026 billion yuan ($1.2 billion) for violating data laws, ending a year-long investigation. From an icon of Chinese technology in the eyes of foreign investors, the ride-hailing app has become a cautionary tale of what can happen if a company deviates from what authorities expect. would like.
June 30, 2021: Successful IPO in New York
Just before the 100th anniversary of the founding of the Communist Party of China, Didi raised $4.4 billion from an IPO in New York, bringing the company’s value to about $70 billion. Since 2012, the app has successfully raised $19.2 billion in other funding rounds.
Even so, Didi omitted the usual celebratory and promotional campaigns when a business IPO succeeds, fueling rumors.
July 2, 2021: China announces investigation of Didi
The Cyberspace Administration of China (CAC) launched an unprecedented investigation into Didi over data privacy and “national security” issues, shocking investors. Didi was ordered to stop registering new users on the main app.
4/7/2021: Didi app was removed from the “markets”
The CAC banned Didi’s main app from app marketplaces indefinitely, citing “serious violations of the country’s laws and regulations through unauthorized collection and use of user information.”
9/7/2021: Didi angers Beijing
According to SCMP, Didi angered Beijing by implicitly opposing.
10/7/2021: Dozens of related apps were removed
The CAC has banned dozens of Didi-related apps from Chinese app markets, accusing them of illegally collecting user data. These include platforms for corporate customers, Didi drivers, etc. The CAC also bans websites and platforms that provide links to Didi’s services. The 25 applications were ordered to “completely fix outstanding problems in accordance with the requirements of national laws and standards”.
July 16, 2021: Task force begins investigation of Didi
A dedicated team consisting of representatives from seven ministries, including the CAC, the Ministry of Public Security and the Ministry of Security, arrived at Didi’s office to conduct an investigation. Other ministries participating in the on-site inspection include the Market Regulatory Authority (SAMR), the Ministry of Natural Resources, the Ministry of Transport, and the National Taxation Department.
July 29, 2021: Didi denies privatization information
The Wall Street Journal reported that Didi considers privatization to appease Chinese authorities and will compensate investors for losses. However, Didi denied the allegation on Weibo.
September 4, 2021: Didi denies Beijing investment news
Didi denied reports of Beijing authorities proposing to invest in the company, putting it under control. Citing a source close to the matter, on September 3, 2021, Bloomberg reported that Shouqi Group – a conglomerate with ties to Beijing – and other firms want to buy shares in Didi.
September 7, 2021: Didi establishes security council
Founder and CEO Didi Cheng Wei leads the new Data Security (IDS) panel.
September 21, 2021: Didi denies the news that co-founder Jean Liu has left
Didi said the Reuters article about co-founder Jean Liu leaving the company was untrue and threatened to take legal action for spreading malicious rumors.
December 3, 2021: Didi announces plans to delist in New York
On its Weibo account, Didi said it would start the process of delisting on the New York Stock Exchange and prepare to list in Hong Kong.
12/1/2022: Didi negotiates IPO in Hong Kong
According to SCMP, Didi Global is in talks to IPO on the Hong Kong Stock Exchange in the second quarter.
March 11, 2022: Didi postpones IPO plan in Hong Kong
Didi is said to have shelved the plan after it failed to reassure Chinese authorities about the system’s handling of sensitive user data.
4/5/2022: Didi faces SEC investigation
Didi Global revealed in its annual report that it was also under investigation by the US Securities and Exchange Commission (SEC) over its $4.4 billion IPO in New York.
May 23, 2022: Didi’s General Meeting of Shareholders approved the delisting plan
Didi Global was approved to delist at a special shareholder meeting. In just 11 months, its market value has “evaporated” $ 60 billion, making Didi Global a great lesson for those who want to invest in Chinese technology stocks.
June 12, 2022: Didi starts trading on the OTC market
Didi stock began trading on the OTC market, two weeks after shareholders voted to leave the NYSE.
July 21, 2022: Record penalty
In addition to the $1.2 billion fine, two Didi directors, Will Chang Wei and Jean Liu Qing, were each fined 1 million yuan. Didi announced on Weibo that it will thoroughly fix the violations.
Du Lam (According to SCMP)