Chinese authorities to end year-long cybersecurity probe into Didi, Full Truck Alliance and Kanzhun
China is concluding yearlong probes into ride-hailing giant Didi and two other U.S.-listed tech companies, Full Truck Alliance and Kanzhun, The Wall Street Journal reported, citing people familiar with the matter.
Didi’s mobile app would be permitted to return to app stores in domestic china after the investigation is completed, and the ban on adding new users would also be lifted, according to the report.
Last year, Chinese regulators launched a cybersecurity investigation into Didi, days after its U.S. IPO. Later, in July, the Cyberspace Administration of China accused Didi of illegally collecting user data, ordered its apps to be removed from app stores and suspended new user registrations.
According to the report, Chinese logistics platform Full Truck Alliance and online recruitment firm Kanzhun, which came under similar cybersecurity scrutiny from regulators at about the same time as Didi, will also be allowed to restart new user registrations.
Following the report, Full Truck Alliance has reportedly began to accept new mobile app user registrations on late Monday.
Chinese authorities along with the CAC told Didi and the other two firms about the plans to end the probes in a meeting last week, the Journal reported. Didi is expected to face a large fine, while the Full Truck Alliance and Kanzhun will face smaller ones, the Journal said.
Last Month, Didi announced that it plans to file a FORM 25 with the U.S. Securities and Exchange Commission (SEC) on or after June 2 to delist its American depositary receipts (ADRs) from NYSE. Previously, in a filing to SEC on May 11, the trouble-ridden company pointed out that the planned delisting was critical to restoring its services and a possible future listing in Hong Kong.
Shares of Didi had risen more than 50% to $2.50 apiece as of writing, but that was still well below its IPO price of $14.
The report may signal that China’s crackdown on the Internet industry, which started in December 2020, is coming to an end. Delisting fears, regulatory pressure, severe COVID-19 lockdowns, and the Federal Reserve’s tightening of monetary policy have sent shares of Chinese tech companies listed in the U.S. down sharply since January.
Shares of Chinese tech giants Alibaba Group, Tencent, Baidu, JD.com and Pinduoduo jumped in the wake of the news.