United States securities and exchange commission logo
September 22, 2022
Feng Lin
Chief Financial Officer
Uxin Ltd
1&3/F, No. 12 Beitucheng East Road
Chaoyang District, Beijing 100029
Re: Uxin Limited
Form 20-F for the
Year Ended March 31, 2022
Filed August 1,
2022
File No. 1-38527
Dear Mr. Lin:
We have limited our review of your filing to the financial
statements and related
disclosures 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 20-F for the Year Ended March 31, 2022
Item 3. Key Information, page 3
1. We note your disclosure
that you are not a Chinese operating company but a Cayman
Islands holding company
with operations conducted by your PRC subsidiaries based in
China. Disclose that
this structure involves unique risks to investors. Your disclosure
should acknowledge that
Chinese regulatory authorities could disallow this structure,
which would likely
result in a material change in your operations and/or a material change
in the value of your
securities, including that it could cause the value of such securities to
significantly decline
or become worthless. Provide a cross-reference to your detailed
discussion of risks
facing the company as a result of this structure.
2. We note your disclosure
that you face risks associated with "regulatory approvals on
offshore offerings,
anti-monopoly regulatory actions, and oversight on cybersecurity and
data privacy" and that
PRC laws and regulations restrict and impose conditions on foreign
investment in
value-added telecommunication services. Please expand your disclosure
Feng Lin
FirstName
Uxin Ltd LastNameFeng Lin
Comapany 22,
September NameUxin
2022 Ltd
September
Page 2 22, 2022 Page 2
FirstName LastName
to address how recent statements and regulatory actions by China s
government related to
these laws and regulations 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. Include a
cross-reference to each individual risk factor.
3. Please expand your disclosure about the Holding Foreign Companies
Accountable Act on
page 5 to clearly state whether your auditor is subject to the
determinations announced by
the PCAOB on December 16, 2021 and whether and how the HFCAA and
related
regulations will affect your company. Disclose that trading in your
securities may be
prohibited under the Holding Foreign Companies Accountable Act if the
PCAOB
determines that it cannot inspect or investigate completely your
auditor, and that as a
result an exchange may determine to delist your securities. Also
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. Please also revise here and in the risk
factors to state that you
have been included on the conclusive list of issuers identified under
the HFCAA on our
website, and acknowledge the ramifications of such identification,
including volatility in
the trading price of your ADS's.
4. We note your disclosure that we, us, our company, or
our refers to Uxin Limited
and its subsidiaries, and, when describing your historical operations
and consolidated
financial information, also includes the former VIEs and their
subsidiaries in
China. Refrain from using terms such as we or our when
describing activities or
functions performed by the former VIEs in their historical capacity.
In addition, please
refrain from implying that the historical contractual agreements were
equivalent to equity
ownership in the former VIEs. Any references to control or benefits
that accrued to you
because of the former VIEs should be limited to a clear description of
the conditions you
have satisfied for consolidation of the former VIEs under U.S. GAAP.
Your disclosure
about historical operations should clarify that you were the primary
beneficiary of the the
former VIEs for accounting purposes. Revise throughout the document,
as applicable.
5. We note your disclosure on page 6 and your reference to the risk
factors about restrictions
and limitations on your ability to distribute earnings as well as the
ability to settle amounts
owed under historical VIE agreements. Please expand your disclosure to
provide a clear
description of how cash is transferred through your organization.
Disclose your intentions
to distribute earnings and the ability to settle amounts owed under
historical VIE
agreements, if any. Quantify any cash flows and transfers of other
assets by type that have
occurred between the holding company, its subsidiaries, and the former
VIEs, and
direction of transfer. Quantify any dividends or distributions that a
subsidiary or the
former VIEs made to the holding company and which entity made such
transfer, and their
tax consequences. Similarly quantify dividends or distributions made
to U.S. investors, the
source, and their tax consequences. Your disclosure should make clear
if no transfers,
dividends, or distributions have been made to date. Provide a
cross-reference to
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Uxin Ltd LastNameFeng Lin
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2022 Ltd
September
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a condensed consolidating schedule and the consolidated financial
statements. Describe
any restrictions on foreign exchange and your ability to transfer cash
between entities,
across borders, and to U.S. investors. Provide a cross-reference to
your description in your
summary risk factors and risk factors sections.
6. Please amend your disclosure here and in the summary risk factors and
risk factors
sections to state that, to the extent cash in the business is in the
PRC/Hong Kong or a
PRC/Hong Kong entity, the funds may not be available to fund
operations or for other use
outside of the PRC/Hong Kong due to interventions in or the imposition
of restrictions
and limitations on the ability of you or your subsidiaries by the PRC
government to
transfer cash. State that there is no assurance the PRC government
will not intervene in or
impose restrictions on the ability of you, your subsidiaries, and the
former VIEs to transfer
cash. Provide cross-references to these other discussions.
7. To the extent you have cash management policies that dictate how funds
are transferred
between you, your subsidiaries, or investors, summarize the policies
and disclose the
source of such policies (e.g., whether they are contractual in nature,
pursuant to
regulations, etc.); alternatively, state that you have no such cash
management policies that
dictate how funds are transferred.
8. We note your disclosure on page 3 that historically, you were subject
to a series of
contractual arrangements with the former VIEs and the shareholders of
the former VIEs
until March 31, 2022, when you completed the restructuring to
terminate the contractual
arrangements with both of the former VIEs becoming wholly owned
subsidiaries. Provide
a diagram of the company s corporate structure, identifying the
person or entity that owns
the equity in each depicted entity, and identify clearly the entity in
which investors hold
their interest and the entity(ies) in which the company s operations
are conducted. Discuss
the impact of the Restructuring on your business operations, to the
extent material.
9. We note your disclosure on page 6 that you have not received any
requirement from
Chinese governmental authorities to obtain "other permissions" for
your
operation. Disclose each permission or approval that you and your
subsidiaries are
required to obtain from Chinese authorities to operate your business
and to offer your
securities to foreign investors. State affirmatively whether you have
received all requisite
permissions or approvals and whether any permissions or approvals 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. Additionally, we note that you
do not appear to
have relied upon an opinion of counsel with respect to your
conclusions that you are not
required to obtain permissions from the China Securities Regulatory
Commission, or to go
through cybersecurity review by the Cyberspace Administration of China
to operate your
business and to offer securities to investors. If true, state as much
and explain why such an
opinion was not obtained. In addition, explain how you came to that
conclusion and the
Feng Lin
Uxin Ltd
September 22, 2022
Page 4
basis on which you made that determination.
10. Please provide in tabular form a condensed consolidating schedule that
disaggregates the
operations and depicts the financial position, cash flows, and results
of operations as of
the same dates and for the same periods for which audited consolidated
financial
statements are required. The schedule should present major line items,
such as revenue
and cost of goods/services, and subtotals and disaggregated
intercompany amounts, such
as separate line items for intercompany receivables and investment in
subsidiary. The
schedule should also disaggregate the parent company, the former VIEs
and its
consolidated subsidiaries, the WFOEs that are the primary beneficiary
of the former VIEs,
and an aggregation of other entities that are consolidated. The
objective of this disclosure
is to allow an investor to evaluate the nature of assets held by, and
the operations of,
entities apart from the former VIEs, as well as the nature and amounts
associated with
intercompany transactions. Any intercompany amounts should be
presented on a gross
basis and when necessary, additional disclosure about such amounts
should be included in
order to make the information presented not misleading.
D. Risk Factors, page 11
11. We note that you unwound the VIE structure. To the extent that there
are material risks
associated with this action, including any residual risk with respect
to prior agreements
under the VIE structure, paying the consideration for termination of
the VIE structure, or
otherwise, please revise to state as much.
Summary of Risk Factors, page 11
12. Please expand your summary of risk factors to disclose the risks that
your corporate
structure and being based in or having the majority of the company s
operations in China
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 document. 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 your securities. 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
FirstName LastNameFeng Lin
ability to offer or continue to offer securities to investors and cause
the value of such
Comapany NameUxin
securities Ltd
to significantly decline or be worthless. Provide a
cross-reference to each
relevant individual
September 22, 2022 Page 4 detailed risk factor.
FirstName LastName
Feng Lin
FirstName
Uxin Ltd LastNameFeng Lin
Comapany 22,
September NameUxin
2022 Ltd
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FirstName LastName
The approval and/or other requirements of the CSRC, the CAC, or other PRC
governmental
authorities..., page 34
13. Please expand you disclosure to explain to what extent you believe
that you are compliant
with the regulations or policies that have been issued by the CAC to
date. Provide the
basis upon which you made this determination.
The PRC government's oversight over our business operation..., page 36
14. We note your disclosure that "[t]he PRC government s oversight over
[y]our business
operation could result in a material adverse change in our operations
and the value of our
ADSs." 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, revise to 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.
Our ADSs will be prohibited from trading in the United States under the Holding
Foreign
Companies Accountable Act..., page 47
15. Please revise the last paragraph of this risk factor to identify the
Accelerating HFCAA by
name.
In closing, 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 Jennie Beysolow at 202-551-8108 or Taylor Beech at
202-551-4515
with any questions.
Sincerely,
Division of
Corporation Finance
Office of Trade
& Services
cc: Shu Du, Esq.