Didi handed stock options worth over $3 bn to senior members ahead of IPO

Didi Global Inc handed a group of senior executives and board members stock options worth as much as $3.1 billion weeks before its initial public offering. The stock options were described by the ride-hailing company as ‘nominal’ in its regulatory filings and are free from the four-year vesting restriction. The recipients would be able to convert them into normal shares and sell them after the six-month lockup period expires.

Didi said in the filing that it issued 66.7 million options in the second quarter to some senior leaders. Out of that 63.5 million were vested immediately, according to a report in Bloomberg.

These grants could prove to be another cause of concern for investors amid the Chinese government’s scrutiny of the ride-hailing giants. The government ordered app stores to remove the app in its home market, sending the stock down more than 20 per cent.

Co-founder and CEO Cheng Wei saw his net worth drop by about $1.2 billion, while co-founder and President Jean Liu shed about $300 million in two trading sessions.

The Chinese government’s crackdown on the app came days after it raised $4.4 billion in its IPO. This came on the back of the regulators’ warning to Didi as early as three months ago to delay its landmark US IPO due to national security concerns involving its huge bank of data. Before that the country’s antitrust watchdog ordered Didi to check its arbitrary price hikes and treatment of drivers.

President Xi Jinping's government is aiming to bring the country’s tech firms under control. The government is concerned about the sensitive information of users that such firms hold.

Also read: China steps up supervision of overseas-listed firms after Didi IPO drama
Also read: Ride-hailing app Didi suspended in China over data violation