China will impose a millionaire fine on Didi, owner of 99 in Brazil, says newspaper

China is preparing to impose a fine of more than $1 billion on shipping giant Didi to end an extensive investigation, The Wall Street Journal reported.

Didi, which has become known as China’s answer to Uber, has been a major target of the widespread crackdown on the tech sector after years of growth before regulators intervened.

The fine, imposed for Didi’s cybersecurity practices, would be equivalent to more than 4% of its $27.3 billion in revenue last year and would pave the way for a listing on the Hong Kong stock exchange. , according to the Wall Street Journal.

If Didi’s fine is upheld, it would be the highest levied on a Chinese tech company since e-commerce giant Alibaba was ordered to pay $2.75 billion in April 2021 for anticompetitive practices.

So far, Didi has not responded to an emailed request for comment from Reuters.

Citing unnamed sources, the newspaper said that after the fine is announced, the government will ease restrictions on Didi’s operations.

The company was blocked from adding new users and its apps were removed from China’s online stores.

The American newspaper’s report sparked a rally in Chinese technology stocks in Hong Kong on Wednesday (20), amid investor hope that the regulatory storm that has swept the sector for the past two years will come to an end.

Alibaba shares rose 4%, while gaming company Tencent rose 2.5% in morning trade.

Didi ran into trouble in June 2021 after moving forward with an initial public offering in the United States, apparently against Beijing’s wishes. Shortly after raising $4.4 billion, Chinese authorities opened a cybersecurity investigation into the company, causing its shares to plummet.