QUOTES-Reaction to China imposing $1.2 bln fine on Didi Global
CHEN WEIHENG, PARTNER AND HEAD OF U.S. LAW FIRM WILSON SONSINI'S GREATER CHINA PRACTICE: "The administrative fines imposed by the CAC do not only set a record for data security and personal privacy breaches by a Chinese company but also include the maximum monetary penalties for the responsible individuals.
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The following are comments from analysts and investors after China's cybersecurity regulator fined Didi Global Inc 8.026 billion yuan ($1.2 billion) after a year-long probe found the ride-hailing giant had violated laws including ones about data security. CHEN WEIHENG, PARTNER AND HEAD OF U.S. LAW FIRM WILSON SONSINI'S GREATER CHINA PRACTICE:
"The administrative fines imposed by the CAC do not only set a record for data security and personal privacy breaches by a Chinese company but also include the maximum monetary penalties for the responsible individuals. This is expected to generate a chilling effect for other Chinese companies dealing with large quantities of internet data and personal information. "It should be noted the CAC also mentioned its investigation discovery of data dealing activities by Didi with serious national security impact but would not disclose details for national security considerations. This suggests that subject to the national security authority and prosecutors' determination, there could be further consequences on the company and responsible individuals."
SAMUEL SIEW, MARKET SPECIALIST AT CGS-CIMB SECURITIES, SINGAPORE: "Before the conclusion of this, there were a lot of fears in markets that there would be more than just a fine. Now, with it settling as just a fine, it's lighter than what the possible implications were initially feared.
"After this Didi incident, it wraps up most, if not all, of the outstanding technology-related clampdowns that started last year. "It shows that the new direction the Chinese government is taking will be on the technology side. If you look at what the Chinese government said in their recent meetings, they're all favoring a platform economy or the technology economy and they want to use it as a way to help boost the Chinese economy. So that is a shift from what we saw last year, and right now, with much more support, the technology side will see potential uplift."
TRAVIS LUNDY, ANALYST AT QUIDDITY ADVISORS, HONG KONG, WHO PUBLISHES ON RESEARCH PLATFORM SMARTKARMA: "I had expected a $1 billion number because it was a round number. The number chosen was a different one. But similarly still a large penalty against the private equity and private owners at the top.
The fine should mark the end of Didi's regulatory troubles. If there were more, they'd have waited until those were understood and addressed to levy the fine. The catharsis should allow the stock to pursue a Hong Kong listing. It could theoretically list in the STAR market but I expect that the existing owners would prefer Hong Kong, and now that the regulatory troubles are settled, Hong Kong would have less reason to nix it."
FRASER HOWIE, AN INDEPENDENT COMMENTATOR AND AUTHOR OF BOOKS ABOUT CHINA'S FINANCIAL SYSTEM: "This closes a very difficult chapter for Didi but the business environment for tech companies remains troubling. In addition, Didi's business is all about moving people but China is going from one lockdown to another. Cities get shut down virtually within hours, a horrible business for ride-hailing."
DAVID BLENNERHASSETT, BALLINGAL INVESTMENT ADVISOR, WHO PUBLISHES ON SMARTKARMA: "Definitely a step forward, and a means to lift restrictions on adding new customers to its platform, and potentially restoring its app on domestic app stores."
"Didi had 174 billion yuan of revenue in FY21, so this fine is 4.6% of revenue. I see media articles saying that Alibaba's fine equated to about 4% of its 2019 domestic sales, and Meituan's was 3% of its 2020 domestic sales." "I would think Didi considers themselves lucky. They stubbornly listed in the U.S. when regulatory issues were outstanding."
MING JIN, MANAGING PARTNER AT BOUTIQUE CHINESE INVESTMENT BANK CYGNUS: "This means the second shoe has fallen and the next step is to resume apps in the app stores, which is a good thing for Didi in terms of business operations. However, it is hard to say whether this will help with its relisting plan in Hong Kong, as Didi still has several unresolved compliance issues."
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)
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