NOEL KING, HOST:
One of China's biggest tech companies is removing its shares from the New York Stock Exchange. The ride-hailing platform Didi came under scrutiny from the Chinese government and now says it's going public on the Hong Kong Exchange. Here's NPR's Emily Feng.
EMILY FENG, BYLINE: This past June was supposed to be a moment of victory for Didi. It raised $4.4 billion by going public in the U.S., but less than two weeks later, a bombshell - Chinese regulators announced Didi was under investigation for potential security violations, specifically that it had not cleared whether sensitive Chinese user data would be compromised.
LESTER ROSS: It reflects real pressure to tighten control over data, which is regarded as an integral element of national security.
FENG: This is Lester Ross, a Beijing-based partner at law firm WilmerHale. And by data, he's referring to the real-time movements and addresses of Didi's more than 600 million users. China's powerful cyberspace administration now must review every company with more than 10 million users who want to go public outside of China. And just this week, U.S. regulators at the Securities and Exchange Commission said they would now force opaque Chinese companies listed in the U.S. to submit to open book audits. Hours later, Didi said it was pivoting to Hong Kong.
ROSS: And since China has basically absorbed Hong Kong under their control, it's clearly more suitable for them. And they feel confident that their companies can access the global markets just as easily in Hong Kong as they can elsewhere.
FENG: Didi's woes are closely tied to a broader regulatory blitz targeting some of the country's biggest private technology firms. New rules on everything from data storage to video gaming have shaved trillions of dollars off of company market valuations. Loopholes, which limit foreign investment in Chinese companies, might be closed now. China wants its companies to stay home and list in Shanghai or Hong Kong. That means what happened to Didi could happen to more Chinese companies down the line. Emily Feng, NPR News, Beijing.
(SOUNDBITE OF RRAREBEAR'S "BACKPACK") Transcript provided by NPR, Copyright NPR.
