Didi Says It Will Proceed With Delisting From NYSE

Less than a year after Didi Global Inc.

DIDI -0.33%

had listed its shares in the US, the Chinese ride-hailing giant said its shareholders had approved its plan to delist from the New York Stock Exchange, ending a regulatory rollercoaster that plunged its market value.

The move will allow the company to move forward after it got caught on Beijing’s campaign to tighten its grip on the Chinese tech giants and their wealth of data. Didi had told shareholders it would have to be delisted before it can solve a cybersecurity investigation in China.

About 96% of shareholders who voted in Monday’s meeting were in favor of the delisting proposal, the company said. A filing on May 11 with the U.S. Securities and Exchange Commission said Didi’s founders, Will Cheng and Jean Liu, had indicated they intended to vote in favor on a one-share basis.

The company said in a separate announcement it had notified the NYSE of its intent and plans to file its listing notification with the SEC on or after June 2. Trading in his shares would stop 10 days later.

Didi referred Monday to the May filing in which it said it will not apply to list its shares on any other exchange until the cybersecurity review and any “correction” measures are completed.

It said investors can trade stocks over the counter, although it said the development of such a market is beyond the company’s control and warned that investors could be locked into stocks with “no practical means of transferring a significant portion of recoup their investment”.

Didi’s US depositary receipts fell from their initial public offering price of $14 less than a year ago, leaving many US investors with heavy losses.

Didi shares began trading on June 30, after the company sold $4.4 billion worth of shares in an IPO. Days later, Chinese regulators launched an investigation into the company’s data infrastructure, ordered it to suspend the registration of new users and forced the removal of some of its popular apps, which are in its core ride-hailing business in China. cut. The probe is underway.

In trading on Monday, New York-listed ADRs traded at $1.55 per share, up 3% from Friday’s close.

In December, Didi said it planned to cut its shares in the US and pursue a listing in Hong Kong. The company has since said it must resolve the cybersecurity assessment before it can request that its apps be reinstated in China and new users re-registered.

Didi said last month that fourth quarter sales were down 12.7% from the same period a year earlier.

Didi’s ordeal took place against the background of a protracted dispute between Washington and Beijing over auditing standards. China has deemed certain company information too sensitive for national security to go into foreign hands. For companies like Didi, data on traffic flows or geographic information can fall into this category.

Meanwhile, the SEC requires companies for three consecutive years to submit their audit working papers — which may contain raw data, including user information and communications between companies and government agencies — for inspection by U.S. regulatory authorities. it.

In May, the SEC said more than 100 Chinese companies, including Didi, had been identified as potential delisting from US exchanges because their audit papers failed to meet US auditing standards.

The Chinese securities regulator has said that Didi’s decision to withdraw from the US market was an independent decision by the company and has nothing to do with other US-listed Chinese stocks. The China Securities Regulatory Commission said in April that Didi’s decision is unrelated to discussions between the two countries over audit requirements.

write to Shen Lu at shen.lu@wsj.com

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