Shareholders of ride-hailing giant Didi Global face long odds to avoid losses, according to analysts, given the choice of voting later this month to delist the company from the New York Stock Exchange (NYSE) or seeing the firm be put under further scrutiny by Chinese regulators. The shareholder vote on delisting, which is scheduled on May 23, would enable Didi to complete its rectification process, part of the Chinese government-ordered cybersecurity review, “to resume normal operations”, according to a filing last week by company chairman and chief executive Will Cheng Wei to the US Securities and Exchange Commission. While that move marks a rare case in China’s corporate history, Beijing-based Didi Chuxing , which went public in New York last year under the name Didi Global, said the delisting will help restore its 26 apps in various Chinese app stores and enable the company to restart new user registrations in its home market. Didi investors are expected to see further losses once the company’s shares move from the NYSE to the over-the-counter (OTC) market, analysts said. “Didi share liquidity will be much lower on the OTC market,” said Luo Zhiyu, a partner at DeHeng Law Offices in Beijing and a specialist in cross-border initial public offerings, mergers and acquisitions. The delisting “may negatively affect the price of and liquidity in [the company’s] securities”, Didi said last week. Didi’s stock has lost nearly 90 per cent of its value since its June 30 IPO, when it initially traded at US$14 per share. The company’s shareholder meeting is expected to be conducted as a virtual conference because of strict travel restrictions in Beijing, where Covid-19 control measures remain in force. Once shareholders agree to get Didi removed from the NYSE, the delisting process can be completed within one to two months, according to Luo. A simple majority, or more than half of the votes cast, is required to finalise Didi’s decision. Cheng and Didi president Jean Liu Qing , who have a combined voting power of 9.67 per cent, will vote in favour of the resolution to delist, according to the company’s statement last week. Didi Global reveals it faces SEC probe over NYSE IPO Didi would be untouchable for some investment houses because they cannot trade pink sheet stocks in the OTC market, according to Winston Ma, an adjunct professor at New York University School of Law. As such, “some major institutional investors may have to divest their Didi holdings”, Ma said. The stakes are high for Didi shareholders because the company said there is no plan B for this delisting initiative. Didi cannot file an application to list in another public market until Beijing recognises the completion of its rectification measures. The China Securities Regulatory Commission (CSRC), which has been talking with its American counterpart, earlier said that Didi’s delisting will not affect other US-listed Chinese tech companies. Will China’s Big Tech crackdown ease? Top advisory body meeting offers hope Meanwhile, there are signs that regulatory pressure on Chinese tech companies could soon ease. The Chinese People’s Political Consultative Conference , the country’s top political advisory body, held a special symposium last Tuesday to promote the digital economy , sending a signal of support to the domestic tech sector after 18 months of regulatory crackdowns . Chinese Vice-Premier Liu He said the government will support the healthy development of the online platform economy and private firms, while supporting digital enterprises in going public on domestic and overseas capital markets. “Liu’s remarks, as well as the progress in resolving China’s auditing dispute with the United States, are expected to pave the way for new overseas listings of Chinese tech firms”, DeHeng Law partner Luo said. Under revised draft rules released last month, CSRC withdrew a requirement that only mainland regulators can conduct on-site audit inspections of Chinese companies listed overseas. How Didi forced its way from Beijing to New York – and ended up in Hong Kong Didi’s case, however, has been privately described by some Chinese officials as yang feng yin wei , which means it must comply publicly in the context of its severity. Founded in 2012 with a seed fund of just 800,000 yuan (US$118,688), Didi was described by company chief executive Cheng as a “technology-driven company with advantages in user experience and data usage, rather than just relying on traffic and capital”, according to his 2016 book Didi: Sharing economy changes China , which was co-written with other senior company executives. Didi marked a big milestone in 2016 when it succeeded in acquiring the China business of Uber Technologies . Didi’s total ride orders reached 9.5 billion last year, which means the firm recorded more than 26 million rides each day, according to its latest financial disclosure. China’s regulatory crackdown , however, has weakened Didi’s leading position in the world’s biggest ride-hailing market. The company’s order volume fell 29 per cent between last June and March this year, according to a calculation of monthly growth rate figures published by China’s Ministry of Transport. Smaller rivals Cao Cao Mobility, incubated by carmaker Geely , and T3 Chuxing , backed by various state-owned companies, saw their orders grow 34 per cent and 104 per cent, respectively, in the same period.