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Didi app set to be restored after China completes probe

Written by Fri 10 Jun 2022

On demand ride hailing firm Didi is hoping to put a challenging year behind it after China is reportedly concluding its cybersecurity probe of the organisation.

The mobile app will also be on Chinese app stores for the first time since Chinese authorities removed it last July. In the hours after the WSJ report was released, US shares of Didi rose 37% to $2.53 in morning trading.

It was just days after Didi made its debut on the New York Stock Exchange that the Chinese regulator demanded the company to stop registering new users due to concerns around national security and the public interest. Didi has announced plans to pursue a new stock market listing in Hong Kong, after it de-lists in the United States.

According to a report in the WSJ, two other firms, Full Truck, and Kanzhun, will also be placed back on app stores along with Didi. An undisclosed range of financial penalties are set to be levied against these firms, with the Chinese government gaining a direct say in the corporate decision making processes. A 1% percent equity stake will also be given to the Chinese government as part of the deal.

Both the Cyberspace Administration of China (CAC) and Didi have not publicly commented on the deal but some industry watchers believe this action by the Chinese regulator is a sign that domestic Chinese internet companies are facing less pressure from officials.

Steven Leung, executive director of institutional sales at brokerage UOB Kay Hian in Hong Kong, agrees that in recent months the Chinese government has signalled to there being less regulation of internet firms.

“This is a second confirmation that the central government isn’t going to do anything more. It helps sentiment,” he told Reuters.

Written by Fri 10 Jun 2022

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