HONG KONG (BLOOMBERG) - The Beijing municipal government denied a report it had proposed an investment in Didi Global that could put the Chinese ride-sharing giant under state control and keep its assets within the Chinese capital.

"After looking into the matter with related parties, the matter of 'Beijing state-backed firms investing in Didi' and 'Shouqi Group teaming up with other state-backed firms to invest in Didi' is untrue," the municipal government's press office said in a statement, without further elaboration.

A representative from Didi said on Saturday (Sept 4) that the firm was working with regulators on a cyber-security review and reports about a Beijing-led investment are untrue.

Bloomberg News reported last week the municipal government had proposed that Shouqi Group - part of the influential Beijing Tourism Group - and other firm based in the capital would acquire a stake in Didi.

One scenario under consideration would be for the consortium to take a so-called "golden share" in the company with veto power and a board seat. The proposal would need approval from China's central government, Bloomberg reported.

The takeover proposal comes alongside a swath of penalties Chinese President Xi Jinping's administration is considering for the country's ride-hailing leader after it went public in New York over the objections of the Cyberspace Administration of China.

The Internet industry overseer saw that decision as a challenge to the central government's authority and officials from multiple government agencies have since launched a probe into its operation. Shares of Didi have declined 36 per cent this year.