Chinese carpooling giant Didi Chuxing announced earlier this month that it was under investigation by the Securities and Exchange Commission (SEC). The stock market watchdog is investigating allegations of “misrepresentations” and “omissions” related to its listing on the New York Stock Exchange last year.
After China, the United States
In its annual filings with the SEC, Didi Global is named as a defendant in numerous class action lawsuits in federal and New York State courts. The Chinese Uber is accused of having made inaccurate declarations and of having forgotten material goods during its registration declarations. Its $4.4 billion IPO took place in June 2021.
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Didi has requested a stay of the suit in state court and is awaiting the outcome of a federal court motion to dismiss. This request is still in progress. “ We cannot predict the outcome and consequences of these actions. At this time, there is nothing to conclude whether such actions will be successful or whether we will be subject to damages, let alone in what amount. “, explained the company in his report (pdf).
Didi serves as an example
China did not look favorably on Didi’s IPO in New York and it is wrong to disobey Beijing. A few days after its entry, the Cyberspace Administration in China (CAC) launched an investigation against the VTC platform, accusing it of illegally collecting data from its users. Results, the company’s application had been removed from the various app stores. Citing the same reason, the CAC had ordered the removal of 25 other applications belonging to Didi in the days that followed.
After 6 months of listing in New York, Didi announced its withdrawal from the New York stock exchange to get closer to China. The company must enter the Hong Kong market in order to end Beijing’s embargo on its applications. ” We have no information on whether or when the ban on downloading our apps will be lifted, or even measure the impact it will have on our financial and operational performance. “says the company.
Scheduled for this summer, its introduction is temporarily on hold. The transport giant does not meet all the cybersecurity expectations imposed by the CAC. For the past year, China has been undertaking a wave of repression within digital companies in order to regain control of this sector. In the meantime, the shareholders of the company are invited, on May 23, to officially decide on its exit from the Wall Street stock exchange.