NEW YORK (Reuters) – DiDi Global’s $740 million settlement of a lawsuit claiming it defrauded investors in connection with its initial public offering is expected to be submitted for approval by a Manhattan federal judge in mid-October, a lawyer for the plaintiffs said on Wednesday.
The class-action lawsuit accused DiDi of concealing and disobeying a Chinese government order to postpone its June 2021 IPO, which raised more than $4.4 billion and valued DiDi at about $67.5 billion, until it resolved cybersecurity and privacy concerns.
Shares of DiDi tumbled in July 2021 as China’s cyberspace regulator, the Cyberspace Administration of China, banned the company from registering new customers and ordered the removal of the DiDi Travel app from smartphone app stores.
The regulator fined DiDi $1.2 billion the following July.
In a letter to U.S. District Judge Lewis Kaplan in Manhattan, the plaintiffs’ lawyer said all parties are negotiating terms of a stipulation of settlement, and requested that all deadlines in the case be put on hold.
DiDi disclosed the settlement last month when it set aside $740 million, equivalent to 5.3 billion yuan, for the accord, leading to an overall second-quarter loss.
Lawyers for the plaintiffs did not immediately respond to requests for comment outside business hours. DiDi and its lawyers did not immediately respond to similar requests.
The case is In re DiDi Global Inc Securities Litigation, U.S. District Court, Southern District of New York, No. 21-05807.
(Reporting by Jonathan Stempel in New York; Editing by Chris Reese and Stephen Coates)
