Chinese state investors are looking to take an ownership stake in ride-hailing giant
Didi Global Inc.,
months after regulators punished the company with restrictions and made it one of the highest-profile casualties of China’s toughening stance on tech.

The municipal government in Beijing is coordinating a proposed investment by a consortium of state-backed companies that includes a competing ride-hailing service, a person familiar with the matter said.

The state investors are seeking voting rights in Didi, a second person said, because that would give the government significant influence over matters like data and other major corporate decisions. The deal could be structured like last year’s investment by state entities to a Chinese unit of
NIO Inc.,
the U.S.-listed electric vehicle company, this person added.

On Saturday, Didi said it is untrue that Beijing’s city government is coordinating with companies to take an equity stake.

Didi pushed through with a $4.4 billion U.S. initial public offering in late June, even though the country’s cybersecurity watchdog had suggested to the company that it postpone its share sale.

Didi has since been subject to punitive actions by Chinese regulators that have sent its newly listed shares plunging. The Chinese government has restricted Didi from accepting new users in the country, removed dozens of its apps from domestic app stores and put it under investigation by seven ministries.

Didi said Saturday that it is actively assisting in cybersecurity reviews.

The potential deal, which was at a preliminary stage, would be led by Beijing Shouqi (Group) Co., a smaller, state-owned rival to Didi that is backed by the city’s Beijing Tourism Group Co., a person familiar with the matter said Friday.

The proposed investment in Beijing-based Didi was earlier reported by Bloomberg. One potential scenario could see the consortium taking a so-called golden share with veto power and a board seat, Bloomberg said.

Shouqi Group counts Beijing Tourism Group, which is wholly owned by the Beijing government, as one of its biggest shareholders. A Shouqi Group subsidiary runs Shouqi Yueche, a ride-hailing service with more than 100 million users. Shouqi Group wants to share Didi’s resources and its Shouqi Yueche service could be co-run by the two companies, the person familiar with the matter added. One possibility would be for Shouqi Yueche to be folded into the Didi app, this person said.

The Beijing government, Beijing Tourism Group and Shouqi Group didn’t reply to requests for comment sent after business hours.

Chinese tech stocks popular among U.S. investors have tumbled amid the country’s regulatory crackdown on technology firms. WSJ explains some of the new risks investors face when buying shares of companies like Didi or Tencent. Photo Composite: Michelle Inez Simon

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The pressure on Didi forms part of a broader regulatory crackdown on Internet companies and other businesses in China that has forced many tech startups to reconsider overseas IPO plans and given global investors pause about investing in companies from China.

Days after Didi’s listing, China said it would tighten rules for companies seeking to sell shares abroad. A draft regulation requires tech companies with data from more than one million users to undergo cybersecurity reviews before pursuing foreign listings.

Didi has been in discussions with authorities in China about options that could address data-security concerns. In late July, The Wall Street Journal reported that Didi was considering going private to placate China, and was considering bringing in state-backed investors for financial support and guidance on data issues.

Didi’s American depositary shares closed Thursday at $8.81 each, down from an IPO price of $14. They were up around 2% in Friday afternoon trading.

The number of ride-hailing orders handled by Shouqi Yueche in July grew by 40.8% from a month earlier, one of the fastest growth rates for a major ride-hailing firm, according to data from the Ministry of Transport. Orders at Didi rose 13.1%. The ministry data don’t include market-share figures, but Didi is by far the country’s largest operator.

China is moving into internet-content companies by acquiring stakes, filling board seats and sending dedicated regulators to police content at firms more frequently.

In April, Beijing ByteDance Technology Co., the China-registered entity of ByteDance Ltd., sold 1% of its shares to a state-backed firm, according to publicly available government records. It also granted the state-backed firm the right to appoint a director to its board, The Wall Street Journal has previously reported.

After Chinese ride-hailing giant Didi made its Wall Street debut, Beijing said it plans to tighten rules for homegrown companies looking to raise money overseas. WSJ’s Yoko Kubota takes a Didi ride to explain what the crackdown means for China’s tech titans and investors. Photo illustration: Ang Li

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Write to Quentin Webb at and Lingling Wei at