The company had been suggested to rein in its IPO ambitions weeks before it took the action to go public, Wall Street Journal (WSJ) reported Monday (July 5).
The regulator wanted Didi to more thoroughly look at its network security.
Didi didn’t find waiting to be the most prudent move. Because there had been no order to stop the IPO, the company moved forward. Didi had been staring down investor pressure for its decision to raise billions of dollars from several venture capitalists, then seeing more pressure to list.
The company had finished its roadshow of pre-offering in just a few days, a much shorter timeframe than most companies complete one.
Didi’s listing on the New York Stock Exchange (NYSE) was able to raise around $4.4 billion, which came out to the biggest stock exchange for a company since Alibaba’s 2014 IPO.
But the company has seen several setbacks from the Cyberspace Administration, WSJ wrote, which quickly delivered several setbacks, including a cybersecurity review of the company and an order for mobile stores to take the Didi app out of circulation.
Didi has reportedly seen mixed signals from various agencies, which have said they support overseas listings but have also said they don’t want to shirk on their protection of various sensitive data and networks.
What’s driving much of Beijing’s worry is “data sovereignty,” which WSJ wrote has been a concern for some time — with President Xi Jinping ramping up control of the technology sector and looking more at the massive storages of digital data as sources of new regulation targets.
Didi saw its shares fall amid a probe from the regulators. A CNBC report found that the probe meant that new users wouldn’t be able to register for the service amid the review.
“We plan to conduct a comprehensive examination of cybersecurity risks, and continuously improve on our cybersecurity systems and technology capacities,” a spokesperson told CNBC in an email, PYMNTS wrote.