Didi Chuxing owns 99 in Brazil
The city of Beijing is considering putting Didi, which owns 99, under state control and has proposed that government companies invest in the per-app passenger transport platform, according to Bloomberg.
The central thrust of the local government’s proposal is to regain control over one of its largest corporations and especially the data it holds, said the Bloomberg.
The Chinese government has tightened regulation of technology companies over the past year to increase competition, data management and employee treatment.
Under the preliminary proposal, some Beijing-based companies, including the Shouqi Group, part of state-owned Beijing Tourism, would buy shares in Didi, reported the Bloomberg, citing unidentified people with knowledge of the subject.
Other scenarios under consideration include a consortium taking a nominal share accompanied by a so-called “golden share”, with veto power and a seat on the board, he added.
Didi, Beijing Municipality, Beijing Tourism and Shouqi did not immediately respond to requests from Reuters for comments.
O Wall Street Journal reported in July that Didi was considering going private to allay China’s data security concerns and offset investor losses since it was listed in the US. This was later denied by Didi.
“We were expecting some action, but not of this magnitude. The big question is what will happen to Didi’s investors?” said the head of Asian research at investment adviser United First Partners in Singapore.
Others said stock market investors seemed to like the supposed proposal.
The golden share arrangement that would be considered would be similar to the investment the Chinese government made in ByteDance, owner of TikTok, said the Bloomberg. Corporate records showed that the Chinese government holds 1% shares in ByteDance and Sina Weibo units.
Didi is the target of cybersecurity investigation by Chinese authorities.
THE Reuters published in August, citing people with knowledge of the matter, that Didi was talking to the state-owned information security company Westone to run its data management and monitoring activities. Didi, which in Brazil owns 99, has SoftBank, Uber and Alibaba among its partners.