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Part 2 | The DiDi VIE (as an example)

Bloomberg

Malcolm Riddell

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CHINADebate

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Matt Levine | Bloomberg

Part 2 | The DiDi VIE (as an example)
Part 2 | The DiDi VIE (as an example)
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Interview
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VIEs
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Interview

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VIEs
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VIEs

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BIG IDEA | ‘The prospectus has a diagram, above, of the corporate structure, which looks almost normal. But everything below the double arrow — the actual ride-hailing business, etc. — is slightly askew.’

‘So here is the prospectus for Didi Global Inc., a Cayman Islands company that has certain contractual relationships with a giant Chinese ride-hailing company. (Technically the top-level Chinese company is called Beijing Xiaoju Science and Technology Co. Ltd., though colloquially it is “Didi Chuxing.”)’

  • ‘Didi Global did an initial public offering of its American depositary shares last week; it has a market capitalization of something like $57 billion.’

‘Page 12 of the prospectus has a diagram, above, of the corporate structure, which looks almost normal:’

  • ‘Looks like a holding company with some intermediate holding companies and operating subsidiaries, fine.’

‘The only weird thing is that somewhere near the middle there is a double arrow (representing “contractual arrangements”) rather than a single arrow (representing “equity interest”).’

  • ‘Didi Global’s shareholders “own,” in some fairly normal sense, everything above the double arrow, right down to one “wholly foreign-owned enterprise” (WFOE) in China.’
  • ‘Everything below the double arrow — the actual ride-hailing business, etc. — is slightly askew; they just have contractual rights to do stuff with it.’
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