Chinese state-owned automaker FAW denies report of buying ride-hailing giant Didi

On May 29, Chinese state-owned automaker FAW Group denied a rumored acquisition of ride-hailing giant Didi.

Bloomberg reported on Friday that FAW has reached out to Didi’s top executives and expressed its interest in becoming a major shareholder in the firm, adding that FAW has pledged to help Didi resolve issues related to data security, paving the way for a Hong Kong listing.

Days after Didi went public, China’s internet watchdog Cyberspace Administration of China (CAC) launched a cybersecurity probe into the company’s data practices and ordered app stores to remove 25 mobile apps operated by Didi. 

In a filing to U.S. Securities and Exchange Commission (SEC) on May 11, Didi pointed out that delisting is critical to restoring its services and seeking a possible future listing in Hong Kong. 

On the evening of May 23, Beijing time, Didi announced that it will start the process of delisting from the New York Stock Exchange (NYSE) by filing a FORM 25 with the SEC on or after June 2.

After the delisting, Didi’s shares can still be traded over-the-counter (OTC), but the liquidity will be significantly lower than when they are traded on exchanges. Many institutional investors would be unable to invest in Didi if it were moved to the OTC.