United States securities and exchange commission logo
December 22, 2022
Alan Yue Zhuo
Chief Financial Officer
DiDi Global Inc.
No. 1 Block B, Shangdong Digital Valley
No. 8 Dongbeiwang West Road
Haidian District, Beijing
People s Republic of China
Re: DiDi Global Inc.
Form 20-F for the
Fiscal Year Ended December 31, 2021
Filed May 2, 2022
File No. 001-40541
Dear Alan Yue Zhuo:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Annual Report on Form 20-F for the Fiscal Year Ended December 31, 2021
Introduction, page 2
1. We note that your
definition of China and the PRC excludes Hong Kong, Macau and
Taiwan. Please revise
to clarify that the legal and operational risks associated with
operating in China also
apply to operations in Hong Kong and Macau. This disclosure
may appear in the
definition itself or in another appropriate discussion of legal and
operational risks
applicable to the company.
Alan Yue Zhuo
FirstName LastNameAlan Yue Zhuo
DiDi Global Inc.
Comapany22,
December NameDiDi
2022 Global Inc.
December
Page 2 22, 2022 Page 2
FirstName LastName
2. We note that your definition of "the VIEs" or "the variable interest
entities" refers to "our
variable interest entities." Please revise to refrain from using terms
such as we or our
when describing activities or functions of the VIEs. For example,
disclose, if true, that
your subsidiaries and/or the VIE conduct operations in China, that the
VIE is consolidated
for accounting purposes but is not an entity in which you own equity.
Summary of Risk Factors, page 3
3. In your Summary of Risk Factors, disclose the risks that your
corporate structure and
being based in or having the majority of the company s operations in
China poses to
investors. In particular, describe the significant regulatory,
liquidity, and enforcement
risks with specific cross-references (title and page number) to the
more detailed discussion
of these risks in the annual report. For example, specifically discuss
risks arising from the
legal system in China, including risks and uncertainties regarding the
enforcement of laws
and that rules and regulations in China can change quickly with little
advance notice; and
the risk that the Chinese government may intervene or influence your
operations at any
time, or may exert more control over offerings conducted overseas
and/or foreign
investment in China-based issuers, which could result in a material
change in your
operations and/or the value of your securities. Acknowledge any risks
that any actions by
the Chinese government to exert more oversight and control over
offerings that are
conducted overseas and/or foreign investment in China-based issuers
could significantly
limit or completely hinder your ability to offer or continue to offer
securities to investors
and cause the value of such securities to significantly decline or be
worthless.
Item 3. Key Information, page 6
4. We note your disclosure regarding the permissions required for your
operations. Revise to
also disclose each permission or approval that you, your subsidiaries,
or the VIEs are
required to obtain from Chinese authorities to offer your securities
to foreign investors.
State whether you, your subsidiaries, or VIEs are covered by
permissions requirements
from the China Securities Regulatory Commission (CSRC), Cyberspace
Administration of
China (CAC) or any other governmental agency that is required to
approve the VIE s
operations, and state affirmatively whether you have received all
requisite permissions or
approvals and whether any permissions or approvals have been denied.
Please also
describe the consequences to you and your investors if you, your
subsidiaries, or the VIEs:
(i) do not receive or maintain such permissions or approvals, (ii)
inadvertently conclude
that such permissions or approvals are not required, or (iii)
applicable laws, regulations, or
interpretations change and you are required to obtain such permissions
or approvals in the
future. In this regard, we also note your disclosure that the company
is subject to a
cybersecurity review and rectification measures in China. Revise to
discuss in greater
detail the current status of the company s cybersecurity review to
include details regarding
the review steps, specific rectification measures required to fully
cooperate with such
review and associated timing. Clarify how your operations have been
or, will
be, impacted by such review (including whether your operations are
expected to change
Alan Yue Zhuo
DiDi Global Inc.
December 22, 2022
Page 3
once the cybersecurity review is completed). We note certain
responsive disclosure was
contained in a Form 6-K filed on May 11, 2022, however, we also note
press reports that
the apps you were required to take down have since been restored and
that you were
assessed a fine for data breaches. Such disclosure should be updated,
revised and
additional specific details should be provided so that investors can
fully understand the
current status of the company's cybersecurity review and its impact on
your business and
operations. Lastly, please revise the associated risk factor on page
15 and the annual
report throughout accordingly.
Our Holding Company Structure and Contractual Arrangements with the VIEs, page
6
5. Please disclose that your holding company structure involves unique
risks to investors.
Where you state that you could could be subject to severe penalties or
be forced to
relinquish your interests in your subsidiaries, revise to state that
this would likely result in
a material change in your operations and/or a material change in the
value of
your securities, including that it could cause the value of such
securities to significantly
decline or become worthless. Please also revise the associated risk
factor on page 39
accordingly.
6. We note your disclosure regarding the legal and operational risks
associated with being
based in or having the majority of the company s operations in
China. Please revise your
disclosure to make clear whether these risks could result in a
material change in your
operations and/or the value of your securities or could significantly
limit or completely
hinder your ability to offer or continue to offer securities to
investors and cause the value
of such securities to significantly decline or be worthless.
7. Please revise to provide a diagram of the company s corporate
structure, identifying the
person or entity that owns the equity in each depicted entity. With
respect to the disclosed
contractual arrangements with the VIEs (in the diagram to be included
here), please revise
to use dashed lines without arrows.
8. We note your disclosure that "[a]s a result of the contractual
arrangements, [you] have
effective control over and are considered the primary beneficiary of the
VIEs." We also
note that neither the investors in the holding company nor the holding
company itself have
an equity ownership in, direct foreign investment in, or control of,
through such
ownership or investment, the VIEs. Accordingly, please refrain from
implying that the
contractual agreements are equivalent to equity ownership in the
business of the VIEs.
Any references to control or benefits that accrue to you because of the
VIEs should be
limited to a clear description of the conditions you have satisfied for
consolidation of the
FirstName LastNameAlan Yue Zhuo
VIEs under U.S. GAAP. Additionally, your disclosure should clarify that
you are the
Comapany NameDiDi
primary Global
beneficiary Inc.VIEs for accounting purposes. Please revise
the annual report
of the
throughout
December 22, 2022asPage
applicable.
3
FirstName LastName
Alan Yue Zhuo
FirstName LastNameAlan Yue Zhuo
DiDi Global Inc.
Comapany22,
December NameDiDi
2022 Global Inc.
December
Page 4 22, 2022 Page 4
FirstName LastName
Permissions Required from the PRC Authorities for Our Operations, page 7
9. We note your disclosure that "[your] PRC subsidiaries and VIEs and
their subsidiaries
have obtained the requisite licenses and permits from the PRC
government authorities that
are material for [your] business operations in China." The disclosure
here should not be
qualified by materiality. Please make appropriate revisions to your
disclosure.
10. With respect to the disclosure in this section, we note that you do
not appear to have relied
upon an opinion of counsel with respect to your conclusions that you
do not need any
additional permissions and approvals to operate your business. If
true, state as much and
explain why such an opinion was not obtained.
11. Please also describe the consequences to you and your investors if
you, your subsidiaries,
or the VIEs: (i) do not receive or maintain such permissions or
approvals, (ii)
inadvertently conclude that such permissions or approvals are not
required, or (iii)
applicable laws, regulations, or interpretations change and you are
required to obtain such
permissions or approvals in the future.
Cash and Asset Flows through Our Organization, page 8
12. Please revise to provide cross-references to the condensed
consolidating schedule and the
consolidated financial statements.
13. Please amend this section and your Summary of Risk Factors on page 3
and risk factors to
state that, to the extent cash or assets in the business is in the
PRC/Hong Kong or a
PRC/Hong Kong entity, the funds or assets may not be available to fund
operations or for
other use outside of the PRC/Hong Kong due to interventions in or the
imposition of
restrictions and limitations on the ability of you, your subsidiaries,
or the VIEs by the PRC
government to transfer cash or assets. In this section, provide
cross-references to these
other discussions.
14. To the extent you have cash management policies that dictate how funds
are transferred
between you, your subsidiaries, the VIEs or investors, summarize the
policies in this
section, and disclose the source of such policies (e.g., whether they
are contractual in
nature, pursuant to regulations, etc.); alternatively, state in this
section that you have no
such cash management policies that dictate how funds are transferred.
D. Risk Factors, page 14
15. Given the Chinese government s significant oversight and discretion
over the conduct of
your business, please revise to highlight separately the risk that the
Chinese government
may intervene or influence your operations at any time, which could
result in a material
change in your operations and/or the value of your securities. Also,
given recent
statements by the Chinese government indicating an intent to exert
more oversight and
control over offerings that are conducted overseas and/or foreign
investment in China-
based issuers, acknowledge the risk that any such action could
significantly limit or
Alan Yue Zhuo
DiDi Global Inc.
December 22, 2022
Page 5
completely hinder your ability to offer or continue to offer
securities to investors and
cause the value of such securities to significantly decline or be
worthless. Additionally,
given your cybersecurity review, please discuss these risks based on
your current facts and
circumstances, as these risks appear to be directly applicable to the
company.
New cybersecurity and data security measures and regulations..., page 15
16. We note that the risk factor discloses a number of new or proposed
laws and regulations
related to privacy, data protection and information security. We also
note that the risk
factor only generally describes the new or proposed laws and
regulations but doesn't
evaluate how the company will actually be impacted or affected by the
new or proposed
laws and regulations. Despite substantial uncertainties, please revise
to clarify
and specifically address if you believe these new or proposed laws and
regulations will
impact or affect the company and its business and any future offerings
based upon the
company's various networks, platforms, types of data collected, number
of users,
etc. Lastly, please also revise the company's permissions and
approvals discussions, as
applicable.
Item 4. Information on the Company
Chengxin Preferred Shares and Convertible Note, page 68
17. We note that you entered into a shareholders agreement with Chengxin
and Chengxin s A-
1 and A-2 round investors, pursuant to which Chengxin s A-1 and A-2
round investors
have the right, exercisable under certain limited circumstances, such
as if Chengxin does
not consummate a qualified IPO within five years of the closing of its
Series A funding
round, to exchange all or part of their Chengxin preferred shares into
shares in your
company. Please tell us how you are accounting for the exchange rights
and how they
were considered in the deconsolidation of Chengxin. Also, disclose the
terms of the
exchange feature and call option on page F-51 and tell us what their
fair value was.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Scott Stringer at 202-551-3272 or Joel Parker at
202-551-3651 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Donald Field at 202-551-3680 or Mara Ransom at 202-551-3264 with any
other
questions.
FirstName LastNameAlan Yue Zhuo Sincerely,
Comapany NameDiDi Global Inc.
December 22, 2022 Page 5 Division of
Corporation Finance
FirstName LastName Office of Trade &
Services