Chinese ride-hailing service company Didi filed proceedings in U.S. on stock slides

Didi Didi Hong Kong Mayor Ng Shu-kei is posing in a taxi in Jordan.

Didi Didi Hong Kong Mayor Ng Shu-kei is posing in a taxi in Jordan.

Chinese ride-hailing giant Didi has been sued by US shareholders after Beijing’s crackdown caused stock prices to fall.

The two proceedings occur a week after Diddy’s New York Stock Exchange debuts.

The company’s US market value has fallen by more than 20% since Chinese regulators instructed online stores to pull apps.

Beijing’s cybersecurity watchdog states that the app illegally collected user’s personal data.

A proceeding filed in federal court in New York and Los Angeles on Tuesday stated that Diddy did not disclose ongoing talks with Chinese authorities on compliance with cybersecurity laws and regulations.

The complaint nominated Diddy’s CEO Will Wei Chen and several other executives and directors. Goldman Sachs, Morgan Stanley and JPMorgan Chase, who are the lead managers of the company’s share sale, have also been nominated as defendants.

China’s China Cyberspace Administration (CAC) announced on July 2 that it has begun an investigation into Didi, which launched a US IPO a few days ago.

Two days later, I ordered the smartphone app store to remove the company’s app from the platform.

Diddy says, “We will try to fix the problem.” In response on Monday..

The company, whose market value fell by about $ 15 billion (£ 10.9 billion) on Tuesday alone, raised $ 4.4 billion and made the second largest initial public offering (IPO) in the United States for Chinese companies.

Chinese regulators have asked Diddy to postpone the sale of shares until three months ago due to cybersecurity concerns, according to Bloomberg, who quoted people familiar with the matter.

Diddy’s prospectus, published prior to the IPO, said the company could limit potential investors’ ability to protect their rights through U.S. courts because it was established under the laws of the Cayman Islands. There is sex. “

The document also mentioned some of the regulatory risks to its business, but did not indicate that CAC would begin an investigation into the company and ban the acceptance of new users.

Founded in 2012, Diddy is especially popular in Chinese cities. Every day, an average of more than 20 million vehicles are arranged in the country via the app.

Diddy, Goldman, Morgan Stanley and JP Morgan did not immediately respond to the BBC’s request for comment.

Who else is Beijing investigating?

Also this week, Beijing announced that it will strengthen oversight of offshore-listed Chinese companies.

Watchdog has set new guidelines that require improved cross-border cooperation with audits and updated rules for “data security, cross-border data flow, and other sensitive information management.”

Shares of US-listed Chinese parent companies, such as trucking company Full Truck Alliance (FTA) and job-seeking platform Kanzun, fell after the announcement.

This update follows China’s crackdown on regulations on many tech companies, from Alibaba to Maytuan, a food delivery service.

On Monday, CAC also said it plans to investigate the FTA. Like Didi, the FTA recently made its debut on the New York Stock Exchange, raising $ 1.6 billion (£ 1.1 billion).

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