Abstract

DiDi Global Inc. (DiDi), a leading China based ride-hailing technology giant, went in for listing on the New York Stock Exchange (NYSE) in June 2021. This became the second biggest US share sale by a Chinese company after Alibaba raised $25 billion in 2014. But immediately after its listing on the NYSE, the Chinese government imposed restrictions on the operations of the company citing non-compliance with regulatory requirements. All the apps sponsored by DiDi were banned in the China market, which significantly affected the market price of the share. Simultaneously, the US Securities Exchange Commission (SEC) also imposed restrictions on foreign companies listing on the US stock exchanges, asking them to comply with the host country’s regulatory requirements and to allow for the scrutiny and audit of their operations. This came in the aftermath of compliance issues coming up in some Chinese companies listed in the US. The Chinese government was cautious about the companies from the mainland listing in the US and other countries as it feared that important data about Chinese users would not remain secure with such companies. The Chinese regulators asked DiDi to delist from the NYSE. The present case study can be used to discuss listing and delisting on foreign stock exchanges; the challenges DiDi faced in providing an exit route to its investors and the need for an MNC to comply with the regulatory requirements of both the domestic and host country.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Listing and delisting requirements of the New York Stock Exchange (NYSE)
• Reasons behind delisting of DiDi from the New York Stock Exchange (NYSE)
• The impact of delisting on DiDi shareholders
• The impact of domestic and hosting country regulatory environment on the MNCs

Keywords

DiDi Global Inc; US Securities Exchange Commission; New York Stock Exchange (NYSE); Listing; Delisting; NASDAQ; Data Security Law; Cyberspace Administration of China; Variable Interest Entities (VIEs)