By Dhirendra Tripathi
Investing.com – Didi Global ADRs (NYSE:DIDI) fell over 5% in Thursday’s premarket trading following a report that authorities in China are considering slapping “serious, perhaps unprecedented” penalties on the company.
According to Bloomberg, the options before the Chinese authorities range from a fine to even delisting the NYSE-listed company. Regulators are miffed that the ride hailing company chose to go public itself even after being advised to delay the listing, pending a review of its data policies.
It listed on July 7 and has mostly traded below its issue price since. Its troubles with the Chinese authorities became public soon after.
According to a report in The Wall Street Journal last month, China’s cybersecurity watchdog had suggested Didi delay its initial public offering and urged it to conduct a thorough self-examination of its network security.
Didi ignored the advice, a move seen by the Chinese as a challenge to Beijing’s authority, the Bloomberg report said.
Didi and scores of other Chinese companies are currently being investigated for their cybersecurity policy framework and the measures they use to protect the data of the millions of Chinese consumers they have on their platforms.
The Chinese are concerned that Didi, being listed on the NYSE, may have to share such private data on consumers with the regulators in the U.S. as part of its listing requirements.