United States securities and exchange commission logo
June 8, 2022
Balakrishnan B S Muthu
Chief Executive Officer
Verde Resources, Inc.
Block B-5, 20/F, Great Smart Tower
230 Wanchai Road, Wanchai
Hong Kong
Re: Verde Resources,
Inc.
Form 10-K for
Fiscal Year Ended June 30, 2021
Filed November 12,
2021
File No. 000-55276
Dear Mr. Muthu:
We have reviewed your filing 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 these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the Fiscal Year Ended June 30, 2021
Risks Associated with Verde Resources, Inc. , page 11
1. You list your principal
executive office resides in Hong Kong on your cover page and that
your headquarters and
operations are located in Hong Kong and Malaysia at page 3. As a
result, you are
considered a China Based Issuer. Please clearly describe the extent of your
operations in Hong Kong
and China including whether you maintain any cash accounts or
any assets in these
jurisdictions.
2. At the forepart of your
risk factors, please provide prominent disclosure about the legal
and operational risks
associated with being based in Hong Kong. Your disclosure should
make clear whether
these risks could result in a material change in your operations or
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
Balakrishnan B S Muthu
FirstName LastNameBalakrishnan B S Muthu
Verde Resources, Inc.
Comapany
June 8, 2022NameVerde Resources, Inc.
June 8,
Page 2 2022 Page 2
FirstName LastName
worthless. Your disclosure should address how recent statements and
regulatory actions
by China s government, such as those related to the use of variable
interest entities and
data security or anti-monopoly concerns, have or may impact the
company s ability to
conduct its business, accept foreign investments, or list on a U.S. or
other foreign
exchange. Please disclose whether your former auditor is subject to
the determinations
announced by the PCAOB on December 16, 2021 and whether and how the
Holding
Foreign Companies Accountable Act and related regulations will affect
your company.
3. We note your principal executive office is in Hong Kong. To the extent
you have any
cash held or transferred through bank accounts in Hong Kong or China,
please provide a
clear description of how cash is transferred through your
organization. State whether any
transfers, dividends, or distributions have been made to date from
these accounts between
the holding company, its subsidiaries and consolidated VIEs, or to
investors, and quantify
the amounts where applicable. Your disclosure should make clear if no
transfers,
dividends, or distributions have been made to date. Describe any
restrictions on foreign
exchange and your ability to transfer cash between entities, across
borders, and to U.S.
investors. Describe any restrictions and limitations on your ability
to distribute earnings
from the company, including your subsidiaries and/or the consolidated
VIEs, to the parent
company and U.S. investors.
4. In your summary of risk factors, disclose the risks that your
corporate structure and being
based in Hong Kong poses to investors. In particular, describe the
significant regulatory,
liquidity, and enforcement risks with cross-references to the more
detailed discussion of
these risks in the filing. For example, specifically discuss risks
arising from the legal
system in China, including risks and uncertainties regarding the
enforcement of laws and
that rules and regulations in China can change quickly with little
advance notice; and the
risk that the Chinese government may intervene or influence your
operations at any time,
or may exert more control over offerings conducted overseas and/or
foreign investment in
China-based issuers, which could result in a material change in your
operations and/or the
value of the securities you are registering for sale. 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.
5. Disclose each permission or approval that you, your subsidiaries, or
the VIEs are required
to obtain from Chinese authorities to operate your business and to
offer the securities
being registered to foreign investors. State whether you, your
subsidiaries, or VIEs are
covered by permissions requirements from the China Securities
Regulatory Commission
(CSRC), Cyberspace Administration of China (CAC) or any other
governmental agency
that is required to approve the VIE s operations, and state
affirmatively whether you have
received all requisite permissions or approvals and whether any
permissions or approvals
Balakrishnan B S Muthu
FirstName LastNameBalakrishnan B S Muthu
Verde Resources, Inc.
Comapany
June 8, 2022NameVerde Resources, Inc.
June 8,
Page 3 2022 Page 3
FirstName LastName
have been denied. Please also describe the consequences to you and
your investors if you,
your subsidiaries, or the VIEs: (i) do not receive or maintain such
permissions or
approvals, (ii) inadvertently conclude that such permissions or
approvals are not required,
or (iii) applicable laws, regulations, or interpretations change and
you are required to
obtain such permissions or approvals in the future. If you do not
believe you are not
required to obtain such permissions or approvals from these Chinese
authorities and are
relying on the opinion of counsel on this matter, disclose the name of
counsel and file a
consent. If you are not relying on the opinion of counsel, please
disclose the basis for the
determination that permissions or approvals are not required.
6. We note your disclosure about the Holding Foreign Companies
Accountable Act. Please
expand your risk factors to disclose that the United States Senate has
passed the
Accelerating Holding Foreign Companies Accountable Act, which, if
enacted, would
decrease the number of non-inspection years from three years to
two years, and thus,
would reduce the time before your securities may be prohibited from
trading or delisted.
Update your disclosure to reflect that the Commission adopted rules to
implement the
HFCAA and 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 pursuant to the HFCAA.
7. In light of recent events indicating greater oversight by the
Cyberspace Administration of
China (CAC) over data security, particularly for companies seeking to
list on a foreign
exchange, please revise your disclosure to explain how this oversight
impacts your
business and your offering and to what extent you believe that you are
compliant with the
regulations or policies that have been issued by the CAC to date.
Risk Factors
Risks Associated with Our Common Stock, page 15
8. Given the Chinese government s significant oversight and discretion
over the conduct of
your business, please revise to highlight separately the risk that the
Chinese government
may intervene or influence your operations at any time, which could
result in a material
change in your operations and/or the value of the securities you are
registering. Also,
given 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, acknowledge the risk that any such action
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.
Balakrishnan B S Muthu
Verde Resources, Inc.
June 8, 2022
Page 4
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Joanna Lam, Staff Accountant at 202-551-3476 or Craig
Arakawa,
Branch Chief at 202-551-3650 with any questions.
FirstName LastNameBalakrishnan B S Muthu Sincerely,
Comapany NameVerde Resources, Inc.
Division of
Corporation Finance
June 8, 2022 Page 4 Office of Energy &
Transportation
FirstName LastName