Chinese officials have urged Didi Global Inc's top executives to prepare a plan to delist the company from the New York Stock Exchange due to data security concerns.

According to sources familiar with the matter, China's tech watchdog has asked the business's management to take the company off the US bourse over concerns about the leakage of sensitive data.

Following this, shares of Didi investors SoftBank Group Corp and Tencent Holdings plunged more than 5% and 3.1%, respectively. Since going public in June, Didi's stock has dropped 42% to $8.11 as of Wednesday's close.

Proposals under discussion include a straight-up privatisation or a share float in Hong Kong followed by delisting from the US.

China demands country's biggest ride-hailing service, Didi, be delisted from U.S - Nairametrics

If the privatisation goes through, shareholders would most likely be offered at least the $14 per share initial public offering price, according to sources, because a lower offer so soon after the June IPO might result in lawsuits or shareholder pushback.

Sources said that the business ran into trouble with Chinese authorities when it went forward with its New York listing despite the regulator's request to put it on hold until a cybersecurity evaluation of its data procedures was conducted.

Didi was promptly investigated by the CAC for its collection and use of personal data. It stated that data had been illegally gathered and ordered the removal of 25 Didi-operated mobile apps from app stores.

Didi responded at the time by saying that it had halted registering new customers and that it would make changes to comply with national security and personal data usage requirements, as well as to protect users' rights.

China's tech giants are facing severe state scrutiny for anti-monopolistic behaviour and the handling of their vast customer data, as the government attempts to reign in their dominance after years of unfettered growth.