Yahoo Finance Didi, Tencent, Alibaba Fall As China Regulator Fines For Old Deals
Dhirendra Tripathi
Investing.com – Didi Global (NYSE:DIDI), Tencent (NYSE:TME) and Alibaba (NYSE:BABA) stocks were lower during Thursday’s premarket trading as the Chinese regulator fined them for a series of irregularities related to merger deals over the past decade.
Didi stock fell 6%, Tencent stock 4.6% and Alibaba stock 2.8%.
The State Administration for Market Regulation fined all three on Wednesday, and while 500,000 yuan ($77,000) is small change for the country’s big tech, it is the maximum amount allowed under China’s antitrust law for merger deal transgressions, according to Alibaba-owned South China Morning Post.
Some of the deals receiving punishment occurred before SAMR was formed in 2018, the SCMP said.
The fine comes at a time when Beijing has intensified its scrutiny of domestic technology companies, particularly those listed on U.S. exchanges. The contentious issues include data security, consumer privacy and anticompetitive practices.
Last weekend, Chinese authorities asked Didi to stop onboarding new users and asked stores like WeChat and Alipay to take them off their platforms.
In a brief statement on Tuesday, China’s State Council said rules for overseas listings will be revised and publicly-traded firms will be held accountable for keeping their data secure. It also said China will step up its regulatory oversight of companies trading in offshore markets.
As many of those firms are listed on the Nasdaq or the NYSE, Chinese authorities are concerned about the data on their consumers these companies are required to share with the Securities and Exchange Commission and other American authorities to comply with the listing norms.
The new restrictions threaten to stop the companies affected from unlocking value in the various subsidiaries of the business empires they have created. Elsewhere on Thursday, the Financial Times reported that Keep, China's most popular fitness app, had pulled plans for a U.S. listing. Keep's backers include Tencent and Japan-based SoftBank (OTC:SFTBY).
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