Cyber Security

After Didi, China launches an investigation into other US-listed firms

The Cyberspace Administration of China (CAC) has ordered an investigation into online recruiter, and truck-hailing applications Huochebang and Uunmanman, in an effort to further crackdown on US-listed firms. The regulator of China had recently initiated an investigation and suspended app downloads of Chinese ride-hailing company Didi Global Inc.

All these platforms have a substantial user base, with having 24.9 million monthly active users. The truck hailing applications combined have more than 10 million registered truck drivers and more than 5 million truck owners on their platform.

Reasons for Investigations

Didi, as well as a merger between Huochebang, Yumanman, and Kanzhun Ltd (Zhinipin’s owner), went public in the US Stock Market last month. As a result of the investigation, all these applications can no more register new users. The CAC says that the investigations are as per China’s cybersecurity law will “prevent national data security risks and safeguard national security.”

Didi was listed in the US with a $4.4 billion initial public offering. However, after the removal of the app from app stores, the stock fell as much as 30%, to $10.90. Kanzhun Ltd. went down by 16%.

While the decision will impact both Chinese and American investors, the Chinese government perhaps expects American investors to lose the most. The move may also indicate China’s tightening grip on corporate leaders.

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Rohit Ranjan Praveer

Rohit is a practicing advocate at Delhi. Beginning as a tech enthusiast, Rohit always had a keen interest in computer forensics and information security. Building upon these fundamentals, he has undertaken extensive research on various techno-legal topics and continues his pursuit pass on valuable information to the masses, with a zeal to build something that outlasts him.​

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