Owner of TikTok, Douyin and Toutiao, ByteDance, is reportedly meeting with Chinese government officials over data security requirements before going public earlier this year, according to a report from Bloomberg. It is reported that ByteDance will be proceeding with its preparations for an initial public offering of its domestic assets cautiously due to recent regulatory changes in China, even before the IPO of Didi Chuxing in the US which resulted in the removal from app stores due to serious violation on Didi Global's collection and usage of personal information.
The report cited the Wall Street Journal that in meetings in March with regulators, ByteDance already had put its intentions to go public on hold indefinitely, but the company currently has not shelved its IPO plans and has not decided on specific timing. Bloomberg said according to a source, ByteDance meets regularly with the country's regulators about several issues such as data security, while the discussions in March were part of that ongoing process too.
On Saturday, the Chinese government proposed new laws, requiring all companies heading for an IPO outside of China to undergo a cybersecurity review. On 30 June, Didi Chuxing was listed on the US stock market which was event prior to the Communist Party’s 100th anniversary celebrations in Beijing. However, Bloomberg reported that regulators asked Didi Chuxing 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 store.
Although the Chinese authorities never called for a delay to ByteDance’s possible share offering, they were concerned about data security compliance by its apps in the country. Earlier this year, ByteDance was considering plans to raise several billion US dollars from a listing of its Chinese assets. It was planning to to be listed between the Hong Kong and US market, and it decided to go to the latter one.
In May this year, ByteDance saw a leadership change, with founder Zhang Yiming transitioning to a new role at the end of this year focusing on long-term strategy, corporate culture, and social responsibility. At the same time, co-founder and HR head Liang Rubo was named the new CEO. Zhang and Liang will work in collaboration over the next six months to ensure the smoothest possible transition. Discussions of Liang potentially taking over as CEO began in March this year.
Ever since ByteDance was founded in 2012, Zhang said Liang has been “invaluable partners”, completing the coding for new systems, buying and installing servers, and developing key recruitment and corporate policies and management systems, among the list of key contributions. Liang has also taken on several key roles at ByteDance, including head of R&D, Lark and efficiency engineering, and most recently, HR and management. Lark is an enterprise product by ByteDance that is available in Japan and Singapore.
Meanwhile, Zhang also explained in his letter that since the beginning of 2021, he has spent a lot of time thinking about how to better drive real long-term breakthroughs, “which cannot simply rely on steady, but incremental, progress”. After several months of consideration, Zhang concluded that transitioning out of the CEO role, with all of the related day-to-day responsibilities, would enable him to have a greater impact on longer-term initiatives.
ByteDance CEO to step down and helm new role focusing on strategy
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