Didi says he will proceed with NYSE delisting

Less than a year after Didi Global Inc.

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listing its shares in the United States, the Chinese ride-sharing company said its shareholders had approved its plan to delist from the New York Stock Exchange, completing a regulatory roller-coaster ride that sent its market value plummeting.

The move will see the company move forward after being caught up in Beijing’s campaign to tighten its grip on Chinese tech giants and their data hoards. Didi had told shareholders he had to drop from the list before he could resolve a cybersecurity investigation in China.

Some 96% of shareholders who voted at a Monday meeting voted in favor of the delisting proposal, the company said. A May 11 filing with the U.S. Securities and Exchange Commission said Didi founders Will Cheng and Jean Liu had indicated they intended to vote in favor on a one-vote basis. per share.

The company said in a separate announcement that it has notified the NYSE of its intention and expects to file its delisting notice with the SEC on or after June 2. Trading in its shares would cease 10 days later.

Didi referred to his May filing on Monday in which he said he would not apply to list his shares on another exchange until the cybersecurity review and all “corrective actions” were completed.

He said investors can trade shares over-the-counter, although he said the development of such a market is beyond the company’s control and warned that investors could end up with shares without “any convenient way to recoup a significant portion” of their investment.

Didi’s US certificates of deposit have plunged from their initial offering price of $14 less than a year ago, hitting many US investors with heavy losses.

Didi shares began trading on June 30, after the company sold $4.4 billion worth of stock in an IPO. Days later, Chinese regulators launched an investigation into the company’s data infrastructure, ordered it to suspend new user registrations and forced some of its popular apps to be taken down, reducing its main transport activity in China. The probe is in progress.

On Monday, New York-listed ADRs closed at $1.44 per share, down 4% from Friday.

In December, Didi said he planned to withdraw his shares from the United States and pursue a listing in Hong Kong. The company has since said it needs to resolve the cybersecurity review before it can apply to restore its apps in China and re-register new users.

Didi said last month that its fourth-quarter revenue fell 12.7% from the same period a year earlier.

Didi’s ordeal came against the backdrop of a protracted dispute between Washington and Beijing over auditing standards. China has deemed some corporate information too sensitive to national security to pass into foreign hands. For companies like Didi, data relating in particular to traffic flows or geographical information could fall into this category.

Meanwhile, the SEC is requiring companies to hand over their audit working papers — which may contain raw data, including user information and communication between companies and government agencies — for U.S. regulatory inspection during three years in a row, threatening to pull the companies from US stock exchanges if they don’t. ‘t.

In May, the SEC said more than 100 Chinese companies, including Didi, had been identified as facing possible delisting from US stock exchanges, saying their audit documents failed to meet US auditing standards.

China’s securities regulator said Didi’s decision to pull out of the US market was an independent decision made by the company that has nothing to do with other Chinese stocks listed in the US. China’s Securities Regulatory Commission said in April that Didi’s decision was unrelated to discussions between the two countries over audit requirements.

Write to Shen Lu at [email protected]

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