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Chinese ride-hailing giant Didi came under renewed pressure on Thursday after a report reported that Beijing was considering harsh penalties ranging from a massive fine to a forced delisting following its IPO last month.
Didi’s shares fell more than 7% on Thursday, bringing losses to over 24% since the start of the month. Bloomberg News reported that Chinese regulators are planning a series of penalties against Didi, including a fine likely higher than the record $ 2.8 billion Alibaba paid earlier this year.
The penalties could also include the suspension of certain operations, delisting or withdrawal of Didi’s U.S. shares, the report said, citing people familiar with the matter.
The Didi share has since its market debut on 30.
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Last week, officials from seven Chinese government agencies visited the ridesharing giant’s offices to conduct a cybersecurity clearance. The ride-hailing giant no longer had to register new users and its app was also removed from Chinese app stores.
The Cyberspace Administration of China alleged that Didi illegally collected users’ data.
Beijing is stepping up its oversight of the flood of Chinese US stock exchanges, most of which are tech companies. The State Council recently said in a statement that the rules of the “overseas listing system for domestic businesses” will be updated while tightening restrictions on cross-border data flow and security.
– Click here to read the original Bloomberg News story.
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