Chinese regulators send on-site teams to conduct cyber-security review of Didi
BEIJING (REUTERS, BLOOMBERG) – The Cyberspace Administration of China (CAC) said in a statement on Friday (July 16) that officials from at least seven departments of Chinese regulators sent on-site teams to conduct a cyber-security review of ride-hailing giant Didi Global.
The regulators include the CAC, Ministry of Public Security, Ministry of State Security, Ministry of Transport, Ministry of Natural Resources, State Taxation Administration and State Administration for Market Regulation, according to the statement.
CAC did not offer more details in its statement, but the involvement of several government agencies shows the heavier regulatory pressure on the nine-year-old company.
CAC launched the cyber-security investigation into Didi just two days after it raised US$4.4 billion (S$6 billion) from its New York initial public offering (IPO) on June 30 and ordered app stores to remove its services from China. It cited the need to protect national security and the public interest.
The probe into ride-hailing firm – owned by Chinese billionaire Cheng Wei – set off renewed scrutiny over China’s tech giants, which had already been under pressure from antitrust regulators over alleged abuses in areas like pricing and forced exclusivity, and expanded Beijing’s tech crackdown to include greater oversight over data and foreign IPOs.
Shares of Didi have dropped nearly 12 per cent since its debut. The company twice warned of adverse impact on its business following the removal of its apps in China.
Under revised rules outlining the framework for cyber-security reviews published earlier this month, inspectors would normally be required to conclude their probe within three months, though the process could be prolonged in complicated cases.
Any firm with data on more than one million users will now need to undergo a review before seeking a listing in a foreign country, significantly tightening oversight over its Internet giants and technology start-ups.
Companies going public in Hong Kong will be exempt, Bloomberg News reported Friday, removing one hurdle for businesses that list in the Asian financial hub instead of the United States.
All listings, including those in Hong Kong, will require a sign-off from the China Securities Regulatory Commission under the new framework, sources familiar with the matter said.
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