Didi punishment highlights regulatory risk in China

Significance

This review was launched just over a year ago, after Didi's USD4.4bn listing on the New York Stock Exchange -- the largest IPO by a Chinese firm since Alibaba's in 2014 (USD25bn). As a result of the review, Didi received a fine of more than USD1bn and other penalties.

Impacts

• The fine is probably the most severe punishment Didi will receive, but it still faces several outstanding regulatory issues.
• The looming risk of more penalties and interventions will create difficulties for Didi's efforts to list in Hong Kong.
• Chinese businesses will face increasing difficulties in listing on foreign stock exchanges, or even maintaining their listings there.