ByteDance said to have met with officials over data security

ByteDance had kicked off initial preparations for an initial public offering of its domestic assets. PHOTO: AFP

HONG KONG (BLOOMBERG) - TikTok owner ByteDance is working to ensure it complies with data security requirements before going public after meetings with Chinese government officials over the issue earlier this year, people familiar with the matter said.

The Chinese tech giant, whose apps also include TikTok's Chinese twin Douyin and the news aggregator Toutiao, had kicked off initial preparations for an initial public offering of its domestic assets, media reported in April.

Yet ByteDance has been proceeding cautiously given recent regulatory changes in China, the people said, even before the IPO of Didi Global in New York, which sparked a backlash in Beijing.

The Wall Street Journal earlier reported the March meetings with regulators and added that ByteDance had put its intentions to go public on hold indefinitely.

But the company has not "shelved" its IPO plans and had not decided on specific timing, two of the people said, asking not to be identified discussing private information.

ByteDance meets regularly with Beijing regulators about a range of issues, including data security, and the March discussions were part of that ongoing process, according to one person.

Founder Zhang Yiming did not attend the March meetings, the person said. A ByteDance representative declined to comment.

Companies seeking to raise capital in overseas markets are now facing greater scrutiny, after China on Saturday proposed new laws that will require virtually all firms heading for an IPO outside of China to undergo a cybersecurity review.

Didi had gone ahead to list in New York in June, even though Bloomberg News reported regulators asked it as early as three months ago to delay the debut. Authorities have since commenced a cybersecurity probe into the firm and removed its services from Chinese app stores.

In its report, the Wall Street Journal said regulators never called outright for a delay to ByteDance's possible share offering, but they were concerned about data-security compliance by its apps in the country.

The Cyberspace Administration of China and the China Securities Regulatory Commission did not respond to the Journal's requests for comment.

Trading of ByteDance's shares in private markets have held steady at about US$330 billion (S$446 billion) over the past month, according to a person with direct knowledge, although asking prices for the stock have been higher.

ByteDance had been considering plans to raise at least several billion dollars from a listing of its Chinese assets, Bloomberg reported in April. At that time, it was choosing between Hong Kong and the United States as its listing venue.

The company in March hired Shou Zi Chew from Xiaomi as its CFO, fuelling speculation an IPO was imminent.

The company later issued a statement saying it did not meet the conditions to go public and currently did not have any such plans.

Join ST's Telegram channel here and get the latest breaking news delivered to you.