China looks to close loophole tech firms use for IPOs abroad

Beijing is looking to stop companies from going public on stock markets abroad through a loophole long-used by Chinese tech companies amid heightened concerns over data security, a report said Wednesday.

Such a ban would mark a major step by China to clamp down on listings overseas, after a New York IPO by ride-hailing giant Didi Chuxing went ahead this year despite regulatory concerns.

Authorities have since launched investigations into Didi over cybersecurity, ordered it to be removed from app stores, and extended probes into other US-listed Chinese companies.

China is now planning to ban companies from going public abroad using an offshore structure known as variable interest entities (VIE), closing a gap used by tech giants like Alibaba and Tencent.