Shares of Chinese ride-hailing company Didi Global fell 4.00% on Monday after shareholders voted in favor of the plan to delist from the New York Stock Exchange “as soon as practicable.”
The shares in premarket trading had surged more than 11%.
The move is intended to “better cooperate with [China’s] cybersecurity review and rectification measures,” and Didi’s shares will not be listed on any other exchange before the delisting is completed, the company said in a filing to the US Securities and Exchange Commission.
Shareholders cast 781,060,684 votes in favor of the resolution and 30,374,766 votes against, according to the filing.
Didi said it plans to file a Form 25 with the US Securities and Exchange Commission on or after June 2 in order to delist from the NYSE, which is expected to occur ten days thereafter upon the effectiveness of the form.
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Didi, which posted a loss of RMB 49.3 billion (USD 7.37 billion) last year, has faced troubles from Beijing since it proceeded with a USD 4.4 billion initial public offering in New York on the eve of the Chinese Communist Party’s July 1 centenary despite official misgivings that the listing might allow American regulators to access sensitive domestic data.
Beijing has barred Didi from signing up new customers and evicted its 26 apps from local app stores, requiring it to complete regulatory reviews.
Since Didi’s IPO, Beijing has promulgated new laws and regulations on cybersecurity, data security, personal privacy, and overseas listings, requiring internet companies holding the data of more than 1 million users to undergo a cybersecurity review before listing overseas.
Didi said it has conducted a series of “rectification measures” since the company became subject to the cybersecurity review. These include improving internal management mechanisms in terms of data security and storage, algorithm transparency, and users’ right of free choice, disclosing to users its rules regarding personal information collection, and conducting necessary cleanups of some data it had collected.
But it is unclear when Didi will pass the regulatory review and to what extent the authorities will be pleased with its “rectification.”
Didi’s domestic market share had dropped from 90% to roughly 70% by January, Chinese media outlet LatePost reported, as unrestrained rivals like Meituan and T3 Chuxing snatched customers with special offers and aggressive pricing.
Didi’s quarterly financial reports showed that just three months after its apps were removed from stores, revenue from the company’s domestic division fell by 30% on the year and continued to drop through the end of 2021. Transactions from its domestic segment declined to 2.3 billion in the fourth quarter, from 2.4 billion in the third quarter and 2.6 billion in the second.
Didi’s overseas business has also struggled, despite operating in 15 countries outside China. In the June, September, and December quarters, its international segment’s adjusted loss before interest, tax, and amortization climbed to RMB 1.19 billion, RMB 1.79 billion, and RMB 1.8 billion, respectively.
As of December 31, SoftBank Vision Fund held a 20% interest in Didi, while US ride-hailing group Uber Technologies owned 11.9% and Tencent held a 6.5% stake.
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.