Beijing's municipal government plans investment in Didi Global

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Proposal would give state-run firms control of the world’s largest ride-hailing company, according to people familiar with the matter

Illuminated office windows are shown at night at Didi Global Inc's headquarters in Beijing, China. Picture: BLOOMBERG/YAN CONG

Didi’s shares spiked 8% before paring gains to about 5% higher in premarket trading in New York. It’s unclear how large a stake the city is eyeing and whether its proposal will be approved by senior government officials. Didi is currently controlled by the management team of co-founder Cheng Wei and president Jean Liu, which received aggregate voting power of 58% after the company’s US initial public offering. SoftBank Group and Uber Technologies are Didi’s biggest minority shareholders.

The takeover proposal comes alongside a swath of penalties Xi’s administration is considering for the country’s ride-hailing leader, which debuted in New York in June over the objections of the Cyberspace Administration of China.

The central thrust of the Beijing government’s proposal is to regain control over one of the city’s largest corporations, particularly data that it hoovers up from hundreds of millions of users daily - a fount considered vital to the economy and social stability. China’s government has proposed creating a joint venture with internet firms that would oversee that kind of information, a project led by the People’s Bank of China, Bloomberg News has reported.

Whatever the outcome, Beijing is likely to impose harsher sanctions on Didi than on Alibaba Group , which swallowed a record $2.8bn fine after a months-long antitrust investigation and agreed to initiate measures to protect merchants and customers, Bloomberg News has reported.

 

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