Didi gets ball rolling for HK listing

Ride-hailing giant Didi Global has begun informal talks with the Hong Kong Stock Exchange and could list by the second quarter of this year after Beijing demanded the firm shift its listing from New York to the city, according to reports.

A report by the Financial Times said an investigation launched by Beijing had not found any substantial evidence of the allegation that Didi was transferring or exposing its sensitive data to the United Sates, but "will still find something Didi did wrong," citing a source close to Didi's executive team.

After being publicly listed in Hong Kong, the company will begin the process to delist in the US and will offer holders of its American depositary shares a one-of-one swap with its Hong Kong shares, another report said, quoting a big Didi investor. The Hong Kong listing could take a long time to arrange due to the unresolved government investigation into the company and its continued issues obtaining permits for its business and drivers in several areas across China.

Didi reportedly plans to use a mechanism, known as 'listing by introduction,' that will allow it to list shares in Hong Kong without raising capital or issuing new stock as it seeks to delist from New York, Reuters reported in end-December, quoting sources.

The plans come as Didi has been moving towards withdrawing from the New York Stock Exchange under pressure from Beijing after running foul of Chinese authorities by pushing ahead with an IPO there earlier last year despite being asked to put it on hold while a review of its data practices was conducted.

The Hong Kong mechanism would allow owners of Didi US shares to transfer them to the city's bourse gradually. Unlike typical IPOs, companies listing stock by the introduction in Hong Kong raise no capital and issue no new shares. The mechanism was popular among companies in the past looking to build a brand in Hong Kong and the rest of Greater China.

Didi aims to file for the Hong Kong listing by end-April and list by June, the report said.

The plans are being prepared months after Didi, sometimes dubbed the Uber Technologies of China, made its debut in New York after raising US$4.4 billion (HK$34.32 billion) in the conventional IPO.

It has barred current and former employees from selling shares of the company indefinitely, Reuters reported on December 27, citing the FT.

The 180-day lock-up period post the company's IPO during which current and former staff were not permitted to sell shares was supposed to end on December 27, but the prohibition has been extended without a new end date, according to reports.