According to persons familiar with the situation, Chinese authorities are planning to punish Didi Global more than $1 billion, putting an end to an investigation into the firm's cybersecurity procedures.
According to the sources, the fine would be over 8 billion yuan ($1.28 billion), accounting for roughly 4.7 percent of Didi's total revenue of $27.3 billion last year. They refused to be identified because the information had not yet been made public.
The potential scale of the penalties was originally revealed by the Wall Street Journal on Tuesday.
The ride-hailing company did not immediately respond to a request for comment from Reuters.
Didi's fine would be the heaviest regulatory penalty imposed on a Chinese internet business since China's antitrust authority punished e-commerce powerhouse Alibaba Group and delivery giant Meituan $2.75 billion and $527 million, respectively, last year.
Alibaba's fine was equal to around 4% of its domestic sales in 2019, while Meituan's was equal to 3 per cent of its domestic sales in 2020.
Didi's punishment may pave the way for Beijing to relax a restriction that prevents it from adding new users to its platform and restoring its apps to domestic app stores.
According to Reuters, Didi, which was co-founded in 2012 by former Alibaba employee Will Wei Cheng and is supported by SoftBank Group and Uber Technologies, had previously set aside 10 billion yuan for a potential fine.
The company has struggled to return to normal operations after upsetting Chinese regulators by proceeding with its $4.4 billion New York IPO in June 2021 despite being warned to halt the float.
The Cyberspace Administration of China, China's strong internet authority, initiated a cybersecurity examination into Didi's data practises days after the firm went public, and ordered app shops to remove 25 mobile apps controlled by Didi.
The limits have eroded Didi's dominance, allowing rival ride-hailing firms controlled by Geely and SAIC Motor to gain market share.
In December, the business revealed its intention to delist from the New York Stock Exchange, and in May, its shareholders approved the move.
Didi's stock skyrocketed during its initial public offering (IPO), valuing the company at $80 billion. It was the largest U.S. IPO by a Chinese company since 2014.
In addition to Didi, the CAC is conducting cybersecurity audits of Full Truck Alliance and online employment provider Kanzhun Ltd in July 2021.
On June 29, Kanzhun and Full Truck Alliance announced that the regulator had given their apps the go light to resume new user registrations.
(Source:www.asiafinancial.com)
According to the sources, the fine would be over 8 billion yuan ($1.28 billion), accounting for roughly 4.7 percent of Didi's total revenue of $27.3 billion last year. They refused to be identified because the information had not yet been made public.
The potential scale of the penalties was originally revealed by the Wall Street Journal on Tuesday.
The ride-hailing company did not immediately respond to a request for comment from Reuters.
Didi's fine would be the heaviest regulatory penalty imposed on a Chinese internet business since China's antitrust authority punished e-commerce powerhouse Alibaba Group and delivery giant Meituan $2.75 billion and $527 million, respectively, last year.
Alibaba's fine was equal to around 4% of its domestic sales in 2019, while Meituan's was equal to 3 per cent of its domestic sales in 2020.
Didi's punishment may pave the way for Beijing to relax a restriction that prevents it from adding new users to its platform and restoring its apps to domestic app stores.
According to Reuters, Didi, which was co-founded in 2012 by former Alibaba employee Will Wei Cheng and is supported by SoftBank Group and Uber Technologies, had previously set aside 10 billion yuan for a potential fine.
The company has struggled to return to normal operations after upsetting Chinese regulators by proceeding with its $4.4 billion New York IPO in June 2021 despite being warned to halt the float.
The Cyberspace Administration of China, China's strong internet authority, initiated a cybersecurity examination into Didi's data practises days after the firm went public, and ordered app shops to remove 25 mobile apps controlled by Didi.
The limits have eroded Didi's dominance, allowing rival ride-hailing firms controlled by Geely and SAIC Motor to gain market share.
In December, the business revealed its intention to delist from the New York Stock Exchange, and in May, its shareholders approved the move.
Didi's stock skyrocketed during its initial public offering (IPO), valuing the company at $80 billion. It was the largest U.S. IPO by a Chinese company since 2014.
In addition to Didi, the CAC is conducting cybersecurity audits of Full Truck Alliance and online employment provider Kanzhun Ltd in July 2021.
On June 29, Kanzhun and Full Truck Alliance announced that the regulator had given their apps the go light to resume new user registrations.
(Source:www.asiafinancial.com)
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