China adds 2 more U.S. listed Chinese tech firms to probe after Didi investigation

 

The Cyberspace Administration of China (CAC) has announced that a probe has been opened into Chinese firms listed in the United States of America. Earlier, China began a crackdown on Didi and now it has added two subsidiaries of Full Truck Alliance, a truck hailing company and Boss Zhipin, an online recruitment company.

 

The CAC said that the investigation was opened to “prevent national data security risks.” Two subsidiaries — Yunmanman an Huochebang merged to form Full Truck Alliance, which is listed in New York and raised $1.6 billion in its June IPO is under investigation. It is backed by SoftBank Group Corp. and Tencent Holdings Ltd.. Boss Zhipin, an online recruitment platform owned by Kanzhun is listed on the Nasdaq and raised $912 million in its U.S. IPO, last month is also under investigation.

 

Earlier, the CAC ordered app stores in China to remove Didi Global Inc, the most popular ride hailing app in the country which had earlier displaced Uber in China. Didi also had a successful IPO in the New York Stock Exchange, on Wednesday June 30 and was one of the largest public offerings. The Chinese regulator asked the ride hailing company to fix users’ personal information that was illegally collected.

 

When a company is under a cyber security review, it cannot add new users. Monday, is a federal holiday as the Fourth of July fell on Sunday, so investor reactions on the stocks will be seen on Tuesday in the U.S. However, stocks of the tech giant Tencent and food delivery firm Meituan traded at a lower rate on Monday, in Hong Kong.

 

Several months earlier e-commerce giant Alibaba has been at the center of a Chinese crackdown. It faced a $2.8 billion fine by the regulator after an anti-trust and anti-monopoly investigation. Currently. Meituan is facing a similar probe.


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