BEIJING: China is preparing to strike ride-hailing giant Didi with a fine greater than US$1bil (RM4. 44bil) to wrap up a long-running probe, press reports said, improving investor hopes the fact that country’s tech crackdown is winding down.
Didi, as soon as known as China’s response to Uber, has been among the highest-profile targets from the widespread clampdown on the sector, which saw years of runaway growth and supersized monopolies before regulators walked in.
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The fine – imposed over Didi’s cybersecurity practices – would amount to over 4% of its US$27. 3 billion overall revenue last year plus pave the way because of its new share list in Hong Kong, The Wsj documented on July 19.
Citing unnamed sources familiar with the matter, the Journal said that once the good is announced, the government will ease its restrictions on Didi’s operations.
The firm was avoided from adding new users and its apps were removed from online retailers in China simply by regulators.
The particular WSJ review triggered a move in Chinese tech shares in Hk on July 20, with investors positive that the two-year regulatory storm that hidden the sector has been nearing its end.
Ecommerce giant Alibaba soared 4%, while gaming titan Tencent gained 2 . 5% in early trade.
Didi had hot water in June last year after this pressed ahead with an IPO in the United States, apparently against Beijing’s desires.
Days right after it raised US$4. 4bil (RM19. 57bil) in New York, Chinese authorities launched a cybersecurity probe into the company, sending the shares plunging.
If confirmed, Didi’s fine would be the biggest imposed on a Chinese tech company given that Alibaba was informed to pay US$2. 75bil (RM12. 23bil) within April 2021 since punishment for anti-competitive practices.
Didi did not respond instantly to an emailed request comment.
The shareholders voted to delist the firm from New York in May.
That shift is expected to pave the way for a Hong Kong listing that was reportedly put on hold after China’s top Web watchdog told executives their proposals to prevent security and information leaks were insufficient.
China’s regulatory crackdown has eased this year as it grapples with the economic fallout from its zero-Covid technique, with the country striving to reach its 5. 5% growth target.
However , there is still a rigorous regulatory environment regarding tech firms: Chief executive Xi Jinping last month called for stronger oversight and much better security in the financial tech arena. – AFP