Chinese state-run companies may take control of ride-hailing giant Didi Global under a reported proposal by the city government of Beijing.
Didi has been the subject of a number of government probes and restrictions since it launched an initial public offering on the NYSE in June, over the objections of the Cyberspace Administration of China (CAC), the country’s internet regulator.
Didi is the world’s biggest ride-hailing firm and counts Uber as a prominent investors.
The city government’s preliminary proposal would see Shouqi Group and other state-run companies based in the capital acquire a stake in Didi, Bloomberg reported, citing unnamed sources.
One possible scenario could see the consortium taking a “golden share” in Didi with veto power over significant decisions and a seat on Didi’s board.
Shouqi is itself an operator of a large ride-hailing service called Shouqi Yueche with more than 100 million users nationwide.
It is part of the Beijing Tourism Group, which operates travel agencies, malls, restaurants and hotels in the capital.
Didi is currently controlled by co-founders Cheng Wei and president Jean Liu, with SoftBank Group and Uber Technologies as its biggest minority shareholders.
An earlier investment by the government in the Chinese unit of ByteDance, which operates TikTok, gave the state entity veto rights, and could be a model for an arrangement with Didi.
Another reported deal would have Didi hand over control of its sensitive user data to a state-controlled third party.
The government is seen as seeking to retake control over Didi, which handles large amounts of sensitive user data and has up to now operated in a legal gray area, with a large number of technically unlicensed drivers and cars.
The regulatory moves against Didi, including probes into its handling of user data and its employment practices, have seen the company’s shares lose one-third of their value since it raised $4.4 billion (£3.2bn) in its 30 June IPO in New York.
Alibaba Group was made to pay a record $2.8bn fine and to institute structural changes following an antitrust probe, but the final measures against Didi are likely to be more extensive.
Didi’s IPO was the second-largest offering in the US by a Chinese company, after that of Alibaba in 2014.