China is considering banning its companies from listing on Wall Street by ending a legal loophole through which its tech giants have raised billions of dollars, financial agency Bloomberg said on Wednesday.
Beijing already prohibiting its private groups from being held by foreign capital, the latter have circumvented the difficulty in recent years by creating mirror companies called VIE, for “
variable interest entity
” in English.
Read alsoChina opens a third Stock Exchange in Beijing
These vehicles allowed them to break into Wall Street with a bang, like Alibaba, which broke all records in 2014 by raising $ 25 billion in New York City.
But Beijing began a year ago to downsize to its technological giants, blocking at the end of 2020 another giant IPO that Alibaba planned to organize in Hong Kong and Shanghai for the benefit of its online payments subsidiary, Ant Group.
A new stock exchange in Beijing
According to Bloomberg, who cites sources familiar with the matter, the Chinese government is now preparing to ban its companies from using the VIE structure.
This provision would appear in a new version of the rules on foreign listing that Beijing could finalize before the end of the year, said the financial information agency.
In a context of exacerbated economic nationalism, the communist regime encouraged its companies to list themselves on the national market.
It has just opened a new stock exchange in Beijing, intended for SMEs, particularly those active in new technologies.
Beijing also fears that crucial data accumulated by its tech giants leaks abroad.
Read alsoDidi, the Chinese tech giant, in a hurry to leave Wall Street
Bloomberg said last week that Chinese authorities asked Didi, Uber's equivalent in China, to withdraw from Wall Street where the group has been listed since this summer.
Even though Beijing was not in favor, the company had chosen to list on the New York Stock Exchange, raising 4.4 billion dollars (3.7 billion euros).
Didi, who dominates the car reservation market with driver (VTC) in his country, found himself in the wake of an investigation in connection with his collection of private data.