Chinese ride-hailing company Didi Global to face US lawsuit
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The news: Chinese ride-hailing company Didi Global is facing a lawsuit in the US under allegations it defrauded investors by concealing and disobeying a Chinese government order to postpone its 2021 initial public offering, Reuters reported.
The numbers: US district judge Lewis Kaplan said investors who brought the proposed class action sufficiently pleaded that Didi intended to defraud them in raising more than USD4.4 billion ($6.7 billion) in 2021 IPO, which valued Didi at around USD67.5 billion.
Didi's current market value is at USD18.8 billion and only trades over-the-counter after delisting on the New York Stock Exchange in June 2022.
The context: Kaplan said Didi's desire to sell US depositary shares before an incoming government crackdown on Chinese technology companies gave the company "concrete and personal economic motive" to go public before "the window for high valuation Chinese IPOs in the United States" closed.
Shares of Didi plunged in July 2021 after China's cyberspace regulator banned it from registering new customers. The regulator then fined Didi USD1.2 billion the following year.
The US House of Representatives vote to ban TikTok this week may Didi hit further as the US moves to sanction Chinese-owned apps.
The source: Reuters
