The Chinese government on Sunday ordered the removal of ride-hailing giant Didi Chuxing’s apps from mobile app stores, citing concerns over the company’s collection and use of personal data and other information.
The ban came just days after Didi Chuxing successfully listed its share on the New York Stock Exchange (NYSE), raising US$4.4bn in an initial public offering (IPO).
According to reports, the “unusually swift decision” came just two days after the Cyberspace Administration of China said it was starting a cybersecurity review of the company.
Sunday’s ruling effectively requires major mobile app stores in China, operated by companies such as Apple, Huawei Technologies and Xiaomi Corporation, to delete Didi from their offerings.
The current half-billion or so Didi users have so far been allowed to continue to order services from Didi as long as the app was downloaded before Sunday’s ban.
The ban has come as a major blow to Didi, which is also one of China’s leading developers of autonomous driving technologies and partner with state-owned automaker GAC Group, Hauwei and Geely Auto.
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Shares in Japan’s Softbank, a major shareholder in Didi, opened almost 6% lower in Tokyo on Monday and Didi’s shares were expected to plunge when the New York market opens on Tuesday. Its shares dropped 11% on Friday when the regulator first announced it had launched an investigation.
Other private Chinese technology companies, including Tencent and Alibaba, have come under significant scrutiny by the Chinese authorities over the last year due to data shares and antitrust concerns.
Stock market analysts said Chinese companies would likely become much more cautious in choosing where to list their shares in the future with the Shanghai and Hong Kong stock exchanges likely to be increasingly favoured as a result of this latest government action.