Didi to Pull US Listing in Favor of Hong Kong

China-based ride-hailing group Didi Global won’t be listing in the U.S. after all, pursuing a listing in Hong Kong instead, the company announced Thursday (Dec. 2).

The release says that the company board supports that course of action, adding that Didi “will organize a shareholders meeting to vote on the above matter at an appropriate time in the future, following necessary procedures.”

Didi has faced some trouble as of late, PYMNTS writes, with Chinese state investors choosing to put money into rival company Cao Cao Mobility.

Didi’s difficulties included a ban on registering new users, while regulators did an investigation into the company’s data security. Regulators have been looking harder at ridesharing companies’ activities, with both Didi and competitor Meituan falling under that scope.

However, the situation was different from what it was a few years ago. At that time, Didi had been seen as a near-invincible company, with rivals often not doing very well with capital. That all changed when the government began looking into regulatory issues with Didi.

In September 2021, Cao Cao said that the company got $588 million from a group of investors from the eastern city Suzhou, and planned to use the funds on more expansion and new innovations to make drivers safer.

PYMNTS wrote that Cao Cao had reaped the benefits of the negative reactions to Didi, with many investors looking for a domestic rival to the embattled company.

Read more: Amid Didi’s Regulatory Pressures, China Invests in Rival Mobility Platform

PYMNTS reports that China has been changing its rules on raising overseas investments, making it so companies can’t do an initial public offering (IPO) on foreign stock markets with variable interest entities.

This comes after the China Securities Regulatory Commission (CSRC) made it so that tech firms couldn’t list on foreign markets as of last August. The reasoning was sensitive data — with firms that don’t collect data, like pharmaceutical companies, likely being able to receive the green light to list overseas.

Additionally, China is making a cross-ministry council to approve public listings in foreign markets.

See also: China to Prohibit Foreign IPOs