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Two Congress officials have asked the Securities and Exchange Commission to investigate whether Didi Chuxing, a Chinese horse-sharing company, has misled American women before they were made public last week.
The filmmaker, who sits on the senate’s central banking committee, said he wanted the SEC to assess whether Didi was fully involved in his communications with Chinese officials before the draft was signed.
Didi shares dropped by more than a quarter of the first week of trading on the New York Stock Exchange, after Chinese company ordered its program removed from home stores due to concerns about data security. The drop in stock prices has led to lawsuits for shareholders.
In a statement to the Financial Times, Bill Hagerty, a Republican senator for Tennessee, said: “The Biden Administration and the SEC – whose main goal is to protect the economy and fairly maintain markets – should see to it that Americans are deceived.”
He added: “The SEC should establish rules of transparency and disclosure, and American investors should be aware of the consequences of living in a state-owned, state-owned enterprise such as China.”
Chris Van Hollen, a Democratic senator from Maryland who sits on the banking committee with Hagerty, said US women need “confidence that companies registering on the US exchange do not commit fraud”.
Hollen said shareholders “should be able to learn more about the risks involved in investing in foreign companies – especially those that adopt foreign governments”.
He added: “The SEC should investigate the matter further to see if the investors have been deliberately misled by what Didi has revealed.”
Jen Psaki, a press secretary at the White House, said Thursday that “it is imperative that all companies that write in the US adhere to the highest standards of transparency and disclosure”. But it would not be possible for the SEC to investigate Didi, given the directors’ rights.
The SEC declined to comment.
Didi earned $ 4.4bn from his IPO last week on China’s largest donation in the US since Alibaba in 2014. A few days later, the Chinese internet operator said the company had “serious problems with violating data collection and use of personal information”.
One person close to the company is since he agreed Chinese regulators have advised it to delay the review, although the company denies it was aware of the impending impasse.
Economic Affairs revealed Thursday that the online company also made more than 20 requests for changes to the program before it was mentioned, which the company made.
The disruptive IPO has raised questions about what Didi told US women before the spread. The company said so writing a document was accused by the SEC of holding a meeting in May with Chinese regulators, including cyber security officials, along with some 30 major Chinese companies. But it did not specifically mention any requests to change its program or delay the IPO.
Joseph Grundfest, a professor at Stanford Law School and former SEC Commissioner, asked: “When did Didi know that he was in danger of making laws? Although Didi did not know during the IPO that his program would be banned, why did he not mention his threat?”
He added: “SEC critics and secretaries have questioned Didi’s disclosure.”
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