Senior Chinese officials have pushed back on the proposed actions by the nation’s cybersecurity regulator for Didi Global Inc., according to Bloomberg citing people familiar with the matter.
Didi has been in talks with the Cyberspace Administration of China about a fine and other penalties after proceeding with a U.S. initial public offering last June over the regulator’s objections, Bloomberg reported.
The regulator had aimed to publish a probe report in April, however central government official expressed their dissatisfaction with the proposed penalties and have asked for revisions, Bloomberg reported.
The official citied the proposed penalties were too lenient.
Bloomberg reported its sources says, this is the cause behind Didi to suspend its plans for Hong Kong listing as it was preparing for it delisting in the New York bourse.
The company, once worth about $80 billion, will likely see its stock traded over the counter on the so-called pink-sheets market, home to penny stocks and other riskier businesses.
Representatives for Didi and the CAC didn’t respond to requests for comment on the penalties when approached by Bloomberg. A Didi spokesperson previously referred Bloomberg to their April 16 statement, which stated the option of trading on the pink-sheet market.
It’s unclear what measures the CAC recommended. The ride-hailing giant has explored several alternatives including hiving off data to a third-party Chinese firm and selling a stake to state-backed companies, Bloomberg News has reported.
The China Securities Regulatory Commission said in a statement after last week’s announcement that Didi made the decision to delist based on the market and its own situation.
The latest development has yet again brought uncertainties on Beijing’s long-term agenda on the tech industry which it regards as having amassed too much wealth and power.
