United States securities and exchange commission logo
January 24, 2022
Shibin Wang
Chief Executive Officer and Director
Chenghe Acquisition Co.
Unit 2009, Tower One
Lippo Centre
89 Queensway
Hong Kong
Re: Chenghe Acquisition
Co.
Amendment No. 2 to
Draft Registration Statement on Form S-1
Submitted December
8, 2021
CIK No. 0001856948
Dear Dr. Wang:
We have reviewed your amended draft registration statement and
have the following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Amendment No. 2 to Draft Registration Statement on Form S-1 Submitted
December 8, 2021
Cover Page
1. We note your revisions
in response to comment 1. Please also revise to disclose the
material dates for the
DSL, Draft Measures of Cybersecurity Review, and Draft Measures
for Internet Data
Security, such as their announcement, adoption, etc. Please further
revise to specify the
"recent statements and regulatory actions by the relevant organs of
the PRC government"
related to VIEs and anti-monopoly enforcement actions and
disclose why these
recent statements and actions may have a material adverse impact on
your ability to conduct
business, accept foreign investments, or list on a U.S. or another
Shibin Wang
FirstName LastNameShibin
Chenghe Acquisition Co. Wang
Comapany
January 24,NameChenghe
2022 Acquisition Co.
January
Page 2 24, 2022 Page 2
FirstName LastName
international securities exchange. Please further revise to enhance
your description of the
legal and operational risks associated with being based in Hong Kong
even if you decide
to pursue an initial business combination outside of the PRC. Your
prospectus summary
should address, but not necessarily be limited to, the risks
highlighted on the prospectus
cover page.
2. We note your revisions in response to comment 5. Please revise your
cover page to
disclose your intentions to distribute earning or settle amounts owed
under any VIE
agreements if you decide to consummate your initial business
combination with a target
business based in or primarily operating in the PRC. Please further
revise your cover page
to enhance your discussion of any restrictions of foreign investments,
as well as how these
"may impact the ability to transfer cash between entities [or] across
borders." Please
further revise your summary to enhance your discussion of capital
controls and currency
conversion, consistent with your disclosure on page 97.
Summary
Certain Considerations Relating to Our Corporate Structure Following Our
Initial Business
Combination, page 14
3. We note your revisions in response to comment 3. Please revise your
description of the
VIE organizational structure to reflect its unique risks to investors.
For example only, we
note disclosure that a combined company and/or its PRC subsidiaries
"will exert control
over" or "will control the VIEs," however this appears to conflict
with subsequent
disclosure discussing why these contractual arrangements may be less
effective than direct
ownership. Similarly, please revise your cover page to remove the
implication that this
organizational structure has been formally approved by PRC
authorities. In this regard,
we note your disclosure that "a company based in the PRC may use a
corporate structure
without direct equity ownership held by foreign investors" or "a
series of contractual
arrangements may be entered into between the PRC operating entities."
Please further
revise to enhance your disclosure on the uncertainties regarding the
status of the rights of
a holding company with respect to its contractual arrangements with a
VIE, its founders
and owners and the challenges the company may face enforcing these
contractual
agreements due to uncertainties under Chinese law and jurisdictional
limits. Here and in
the Summary where you discuss the VIE structure, please also state, if
true, that these
contracts have not been tested in court.
Implications of the HFCAA, page 16
4. We note your revisions in response to comment 4. Please also disclose
whether your
auditor is subject to the determinations announced by the PCAOB on
December 16, 2021.
Summary of Risk Factors, page 43
5. We note your revisions in response to comment 6. Please revise to
present your
discussion of the risks that being based in Hong Kong poses to
investors in a series or
Shibin Wang
Chenghe Acquisition Co.
January 24, 2022
Page 3
concise, bulleted or numbered statements. Please also revise to expand
upon your
discussion of risks arising from the legal system in China, including
risks and
uncertainties regarding the enforcement of laws. Acknowledge any risks
that any actions
by the Chinese government to exert more oversight and control over
offerings that are
conducted overseas and/or foreign investment in China-based issuers
could significantly
limit or completely hinder your ability to offer or continue to offer
securities to investors
and cause the value of such securities to significantly decline or be
worthless. Please also
revise to include specific cross-references to the more detailed
discussion of each of the
risks in the prospectus.
Risks Associated with Acquiring and Operating a Business in Foreign Countries,
page 44
6. In the first bullet point on page 45, where you discuss the potential
delisting of your
securities under the Holding Foreign Companies Accountable Act please
expand to state
that trading in your securities could be prohibited under the Act.
Risk Factors, page 47
7. We note your revision in response to comment 8 and reissue. Please
revise to enhance
your discussion of this risk as it applies to your current operations,
as well as any search
for a target company, and delete any indication that you are not
currently subject to
intervention or influence of the PRC government. In this regard we
note, without
limitation, your response letter dated October 28, 2021 that "the
National People's
Congress of the PRC authorizes the Hong Kong Special Administrative
Region to
exercise" autonomy and power in accordance with the provisions of the
Basic Law of the
Hong Kong Special Administrative Region. Please also revise to
highlight this risk as it
applies to the business of any China-based company that you may target
for an initial
business combination, as well as your operations following any initial
business
combination. Please further revise to enhance your discussion of the
recent statements by
the Chinese government indicating an intent to exert more oversight
and control over
offerings that are conducted overseas and/or foreign investment in
China-based issuers.
8. We note your revision in response to comment 9. Please revise to expand
upon why "the
list of potential businesses in [y]our focused industries for the
initial business combination
may be further narrowed or the ability of the combined company to list
in the United
States may be restricted." For example only, it is unclear whether, how
and when you
propose to consider the referenced data security laws and regulations in
the PRC during
FirstName LastNameShibin Wang
your search for a specific business combination target. Similarly, it is
unclear how you
Comapany
will NameChenghe Acquisition
evaluate the combined Co. ability to list in the United
States, if at all, during
companies'
Januaryyour searchPage
24, 2022 for a3target.
FirstName LastName
Shibin Wang
FirstName LastNameShibin
Chenghe Acquisition Co. Wang
Comapany
January 24,NameChenghe
2022 Acquisition Co.
January
Page 4 24, 2022 Page 4
FirstName LastName
Our securities may be delisted under the Holding Foreign Companies Accountable
Act if the
PCAOB were unable..., page 91
9. We note your risk factor disclosure about the Holding Foreign
Companies Accountable
Act. Please update your disclosure to reflect that the PCAOB has
issued its report
notifying the Commission of its determination that it is unable to
inspect or investigate
completely accounting firms headquartered in mainland China or Hong
Kong, and revise
your disclosure in this risk factor accordingly.
You may contact Jeffrey Lewis at 202-551-6216 or Wilson Lee at
202-551-3468 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Christopher Dunham at 202-551-3783 or Mary Beth Breslin at 202-551-3625
with any
other questions.
Sincerely,
Division of
Corporation Finance
Office of Real
Estate & Construction
cc: Joel L. Rubinstein, Esq.