The Cyberspace Administration of China’s (CAC) cybersecurity review of ride-hailing giant Didi Chuxing shows no sign of ending any time soon, as the widely-followed investigation nears the 60-day mark and the company’s business slows, reports the South China Morning Post. Didi incurred the ire of regulators after it rushed to raise $4.4 billion from its initial public offering in New York in June, ignoring their warnings about network security compliance.
On July 2, the CAC, China’s internet watchdog, launched an investigation into Didi and ordered the company’s app removed indefinitely from local app stores, which stopped it from registering new users – the app is yet to be reinstated. There is no binding deadline for the review since this investigation “can be extended in case of special circumstances,” said Nicholas Bahmanyar, a senior consultant for cybersecurity at LEAF law firm in Beijing.
Analysts said the pace of the investigation showed that regulators are exercising prudence in this case, the resolution of which may affect the company’s investors as well as the relationship between the US and China capital markets.