Didi Chuxing (NYSE:DIDI) China’s equivalent of Uber, has warned about the impact of a clampdown on its business just days after a US$68bn float on Wall Street.
Chinese authorities warned the ride-hailing firm on Friday they were investigating the business and on Sunday banned it from app stores.
Didi, which operates predominately in China where it organises 20mln journeys daily, has been accused of illegally using personal data gathered from customers.
China’s Cyberspace Administration (CAC) said: "After checks and verification, the Didi Chuxing app was found to be in serious violation of regulations in its collection and use of personal information."
The ban means Didi will not be allowed to sign up new users, though existing customers can carry on using the app as normal.
In a statement, Didi said: "The company will strive to rectify any problems, improve its risk prevention awareness and technological capabilities, protect users' privacy and data security, and continue to provide secure and convenient services to its users.”
Didi's shares fell by 5% to US$15.53 on Friday but might be hit harder today.
The float was the biggest Chinese listing in the US since the 2014 float of Alibaba and saw the company raise US$4.4bn in new money to fund overseas expansion plans.
China has been cracking down on tech firms based in the country especially those that have looked to expand abroad.
Last year the float of fintech group ANT, another out of the stable of Alibaba founder Jack Ma, was halted days before it scheduled to go ahead after the Chinese authorities pulled in the flamboyant businessman for talks.
Other tech companies have been fined under anti-monopoly rules, while Full Truck Alliance, another recent US stock market debutant, is also facing a CAC investigation.
FTA raised US$1.6bn when it listed and had a value of US$20bn on Friday.