Company says Didi faces SEC investigation over failed IPO

This week, the Chinese passenger transportation giant told the regulator that it is cooperating with the US Securities and Exchange Commission in investigating its share offering, “subject to strict compliance with applicable rules.” [Chinese] laws and regulations.”

“We cannot predict the timing, outcome or consequences of such an investigation,” the company added.

The SEC did not immediately respond to requests for comment after business hours. Didi did not immediately respond to a request for comment.

Didi launched its long-awaited $4.4 billion initial public offering on the New York Stock Exchange on June 30, 2021, the largest public offering in the US. by a Chinese firm since Alibaba debuted in 2014.
But a few days later, the Chinese government banned Didi from using app stores in the country and launched an investigation into the handling of customer data. Authorities in China’s powerful Cyberspace Authority have accused Didi of violating privacy laws and creating cybersecurity risks. Their actions were also widely seen as punishment for the company’s decision to go public abroad rather than in China.
This drama was bad news for investors, with Didi shares plummeting nearly 20% on the first trading day after the ban.
Since then, US regulators have become more cautious about Chinese IPOs: in July, the SEC ordered its staff to solicit additional information from Chinese companies seeking to go public in the United States before approving any plans for them to sell shares.
Regulatory crackdown hit Didi’s domestic business. Company reported a loss of $4.7 billion. for the third quarter of 2021. Its revenue fell 1.7% from the same period a year earlier.
Under pressure from Chinese regulators, Didi announced in December that it would begin the NYSE delisting process and refocus on Hong Kong.
The company will hold a shareholder meeting on May 23 in Beijing to vote on the delisting plan. said in a statement late last month.

Didi shares have lost 86% of their value since their IPO last June.

— Paul R. La Monica contributed to this report.

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