China's Didi on comeback trail after suffering regulatory setbacks

Chinese authorities are set to allow Didi Global's ride-hailing and other apps back on domestic app stores as soon as next week

Reuters
Published : 13 Jan 2023, 09:05 AM
Updated : 13 Jan 2023, 09:05 AM

Chinese authorities are set to allow Didi Global's ride-hailing and other apps back on domestic app stores as soon as next week, Reuters reported on Friday, in yet another signal that their two-year regulatory crackdown on the technology sector is ending.

Didi has been awaiting authorities' approval to resume new user registrations and downloads of its 25 banned apps in China as a key step to resume normal business since its regulatory troubles started in mid-2021.

Didi, launched in Beijing in 2012, ran afoul of the CAC when in July 2021 it pressed ahead with its US stock listing against the regulator's will, sources previously told Reuters.

Following are key events since Didi publicly announced its intention to list in the United States:

June 11, 2021 - Didi makes public the filing for its US listing, setting the stage for what is expected to be the world's biggest initial public offering of 2021.

June 17, 2021 - Reuters reports that China's market regulator has begun an antitrust probe into Didi.

The probe, the latest in a sweeping crackdown on China's so-called "platform" companies, is investigating whether Didi used any competitive practices that squeezed out smaller rivals unfairly, and whether the pricing mechanism used by Didi's core ride-hailing business is transparent enough, sources said.

June 30, 2021 - Didi raises $4.4 billion in its IPO, pricing it at the top of its indicated range and increasing the number of shares sold, giving it a valuation of $73 billion on a fully diluted basis.

The shares end their first day of trading slightly above the IPO price.

July 2, 2021 - The Cyberspace Administration of China (CAC) says it has launched an investigation into Didi to protect national security and the public interest, and that Didi was not allowed to register new users during the probe, sending Didi shares lower.

Didi says it plans a comprehensive examination of cybersecurity risks and would cooperate fully with the relevant government authority.

July 4, 2021 - The CAC orders Chinese app stores to stop offering Didi's app after finding that the firm had illegally collected users' personal data.

Didi says it had stopped registering new users and would remove its app from app stores, as well as making changes to comply with rules and protect users' rights. It says the move may hurt its revenue.

July 5-6, 2021 - Didi says it was unaware before its IPO that the CAC would launch a cybersecurity investigation or order a halt in China to new user registrations and a suspension of app downloads.

Didi shares fall as much as 25% in the first U.S. trading session since Chinese regulators ordered its app off mobile app stores in China.

July 30, 2021 - The US Securities and Exchange Commission says it will not allow Chinese companies to raise money in the United States unless they fully explain their legal structures and disclose the risk of Beijing interfering in their businesses.

Aug 27, 2021 - China is framing rules to ban internet companies whose data poses potential security risks from listing outside the country, including in the United States, according to a person familiar with the matter.

Sept 8, 2021 - China's Ministry of Transport said it would crack down on illegal behaviour in the country's ride-hailing industry.

Sept 10, 2021 - Chinese government officials told leading delivery and ride-hailing companies including Didi, Meituan, Alibaba Group and Tencent Holdings, to improve how they distributed incomes and ensure rest periods for workers.

Sept 20, 2021 - Didi co-founder and President Jean Liu has told some close associates that she intends to step down, Reuters reported.

Oct 21, 2021 - China's cybersecurity watchdog suggested Didi and two other US-listed tech companies explore listings in Hong Kong, the Wall Street Journal reported.

Oct 29, 2021 - CAC published draft guidelines that will subject companies with more than 1 million users in the country to a security review before they can send user-related data abroad.

Nov 8, 2021 - SoftBank Group Corp valued its Didi stake at $7.5 billion, 40% below acquisition cost.

Nov 11, 2021 - Didi was preparing to relaunch its ride-hailing and other apps in China by the end of the year in anticipation that Beijing's investigation into the company will be wrapped up by then, Reuters reported.

Nov 14, 2021 - CAC published draft rules that would require companies pursuing share listings in Hong Kong to apply for cybersecurity inspections if they handle data that concerns national security.

Nov 26, 2021 - Chinese regulators have pressed top executives of Didi to devise a plan to delist from the New York Stock Exchange (NYSE) due to concerns about data security, sources said.

Dec 3, 2021 - Didi announces plan to delist from New York and seek a Hong Kong listing.

Dec 29, 2021 - Didi plans to use a mechanism that will allow it to list shares in Hong Kong without raising capital or issuing new stock as it seeks to delist from New York, Reuters reported.

The company also reported a 1.7% decline in third-quarter revenue, as its domestic business took a hit from the regulatory crackdown. Jan 21, 2022 - China's transport ministry summoned four cargo service platforms including Didi Freight, the cargo division of Didi, over "operational irregularities", according to an announcement from the ministry.

Mar 11, 2022 - Didi has suspended preparations for its Hong Kong listing after failing to appease Chinese regulators' demand to overhaul its systems for handling sensitive user data, Bloomberg News reported.

May 4, 2022 - The US Securities Exchange Commission is investigating Didi over its $4.4 billion IPO in the United States in June 2021, the Chinese ride-hailing giant said.

May 23, 2022 - Didi said it will delist from the New York Stock Exchange, after a majority of the company's shareholders voted in favour of the plan.

June 6, 2022 - Chinese regulators are concluding probes into Didi and two other firms and are preparing to allow their apps back on domestic app stores, the Wall Street Journal reported.

June 8, 2022 - Didi is in talks with state-backed Sinomach Automobile 600335.SS to buy a third of its electric-vehicle unit, as the ride-hailer seeks to focus on growth, Reuters reported.

June 11, 2022 - Didi trades on the NYSE for the last time, nearly a year after the ride-hailer's US listing.

July 15, 2022 - Didi's digital payments unit was fined 4.27 million yuan ($632,170) by China's central bank for a dozen rule violations, amid an effort by the ride-hailing company to appease regulators.

July 21, 2022 - China's cybersecurity regulator fined Didi $1.2 billion.

Aug 11, 2022 - Didi's joint venture with Li Auto has applied for bankruptcy, according to a court filing, pointing to the end of a four-year-old partnership to make electric vehicles.

Jan 13, 2023 - Chinese authorities are set to allow Didi's ride-hailing and other apps back on domestic app stores, Reuters reported.

Toufique Imrose Khalidi
Editor-in-Chief and Publisher