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The Beijing municipal government has proposed an investment in Didi Global that would give state-owned companies control of the world’s largest rideshare company, people familiar with the matter say.
According to the preliminary proposal, the Shouqi Group – which is part of Beijing’s influential tourism group – and other companies based in the capital would acquire a stake in Didi, the people said, asking not to be identified for discussion. private information. Scenarios under consideration include the consortium taking a “golden stake” with veto power and a seat on the board, they added.
Didi said on Saturday he was working with regulators on a cybersecurity review and reports of a Beijing-led investment are false. The company’s U.S.-listed shares climbed 7.5% on Friday morning in New York City. The stock is down 36% this year.
It is unclear how far the city is considering an important stake 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 Chairman Jean Liu. SoftBank and Uber are the main minority shareholders of Didi.
The Beijing Municipal Party Committee press office did not respond to a request for comment, while appeals to Shouqi went unanswered. And the Beijing Tourism group did not respond to a request for comment.
Local governments have traditionally had a say in the restructuring of businesses in their territory, and the envisaged solution dovetails with Chinese President Xi Jinping’s priorities of redistributing wealth and limiting the influence of the internet industry. The city’s proposal could involve taking a significant stake in Didi or a nominal stake accompanied by a gold share and a seat on the board of directors, residents said. This latter model would be similar to a previous investment by the government in the Chinese unity of ByteDance, which gave the state entity a right of veto over important decisions.
The buyout proposal comes with a series of sanctions that the Xi administration is considering for the nation’s leader, who made his New York debut in June over objections from China’s Cyberspace Administration. He has since been trapped by probes about data security and the way he treats his millions of drivers. Most of the options Beijing is considering involve reasserting state control over a business traditionally operated in a legal gray area.
According to the preliminary proposal, the Shouqi Group – which is part of Beijing’s influential tourism group – and other companies based in the capital would acquire a stake in Didi, the people said, asking not to be identified for discussion. private information. Scenarios under consideration include the consortium taking a “golden stake” with veto power and a seat on the board, they added.
Didi said on Saturday he was working with regulators on a cybersecurity review and reports of a Beijing-led investment are false. The company’s U.S.-listed shares climbed 7.5% on Friday morning in New York City. The stock is down 36% this year.
It is unclear how far the city is considering an important stake 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 Chairman Jean Liu. SoftBank and Uber are the main minority shareholders of Didi.
The Beijing Municipal Party Committee press office did not respond to a request for comment, while appeals to Shouqi went unanswered. And the Beijing Tourism group did not respond to a request for comment.
Local governments have traditionally had a say in the restructuring of businesses in their territory, and the envisaged solution dovetails with Chinese President Xi Jinping’s priorities of redistributing wealth and limiting the influence of the internet industry. The city’s proposal could involve taking a significant stake in Didi or a nominal stake accompanied by a gold share and a seat on the board of directors, residents said. This latter model would be similar to a previous investment by the government in the Chinese unity of ByteDance, which gave the state entity a right of veto over important decisions.
The buyout proposal comes with a series of sanctions that the Xi administration is considering for the nation’s leader, who made his New York debut in June over objections from China’s Cyberspace Administration. He has since been trapped by probes about data security and the way he treats his millions of drivers. Most of the options Beijing is considering involve reasserting state control over a business traditionally operated in a legal gray area.
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