United States securities and exchange commission logo
September 13, 2022
Qi Chen
Chief Executive Officer
MOGU Inc.
Huanglong Wanke Center, 23/F, Building No. G, No. 77 Xueyuan Road
Xihu District, Hangzhou, 310012
People s Republic of China
Re: MOGU Inc.
Form 20-F for
Fiscal Year Ended March 31, 2022
Filed July 15, 2022
File No. 001-38748
Dear Mr. Chen:
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.
Annual Report on Form 20-F
Item 3. Key Information, page 3
1. Please explain whether
the VIE structure is used to provide investors with exposure to
foreign investment in
China-based companies where Chinese law prohibits direct foreign
investment in the
operating companies, and disclose that investors may never hold equity
interests in the
Chinese operating companies. We note your disclosure that this structure
could be unenforceable,
but please also state 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 the securities you are registering for sale,
including that it could
cause the value of such securities to significantly decline or become
worthless.
2. Please expand your
discussion regarding the legal and operational risks associated with
Qi Chen
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MOGU Inc.LastNameQi Chen
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being based in or having the majority of the company's operations in
China to make clear
that these risks also could cause your securities to be 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 that
your auditor is subject to the determinations announced by the PCAOB
on December 16,
2021 and how the Holding Foreign Companies Accountable Act and related
regulations
will affect your company (for example, by discussing the consequences
to the company
and its operations, stock, potential offerings and investors if you
are unable "to remain
listed on a United States or other foreign stock exchange"). Please
also discuss the
Accelerating HFCAA wherever you discuss the HFCAA.
3. Please disclose whether your Hong Kong subsidiary has any operations.
If so, please
clarify that the legal and operational risks associated with operating
in China also apply to
operations in Hong Kong, and discuss the applicable laws and
regulations in Hong Kong,
as well as the related risks and consequences.
Our Holding Company Structure and Contractual Arrangements with the VIEs, page
4
4. Please revise your diagram of the company's corporate structure to
identify the persons or
entities that own the equity in MOGU Inc. Please also remove the
arrows on the dashed
lines representing relationships with the VIEs. Please include in this
section the
disclosure that appears in "Contractual Arrangements with the VIEs and
Their Respective
Shareholders" on pages 78-80. Additionally, please expand your
discussion to include
why the contractual arrangements may be less effective than direct
ownership and disclose
the challenges the company may face enforcing the contractual
agreements with the VIEs
due to jurisdictional limits.
5. Please revise any references to control or benefits that accrue to you
because of the VIEs
to limit them to a clear description of the conditions you have
satisfied for consolidation
of the VIEs under U.S. GAAP. Additionally, your disclosure should
clarify that you are
the primary beneficiary of the VIEs for accounting purposes. Please
also disclose, if true,
that the VIEs agreements have not been tested in a court of law.
Please revise the
disclosure throughout the filing to comply with this comment.
Permissions Required from the PRC Authorities for Our Operations, page 6
6. Please expand your discussion of the permissions or approvals that
you, your subsidiaries,
or the VIEs are required to obtain from Chinese authorities to include
permissions or
approvals needed to offer your securities to foreign investors. Please
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
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MOGU Inc.LastNameQi Chen
Comapany 13,
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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. In addition,
your disclosure suggests that you, your subsidiaries and the VIEs are
not covered by
permissions requirements from the China Securities Regulatory
Commission or
Cyberspace Administration of China; if true, please affirmatively make
this statement.
7. We note that you do not appear to have relied upon an opinion of
counsel with respect to
your conclusions that you do not need any permissions and approvals to
operate your
business and to offer securities to investors, other than as
specified. If true, state as much,
explain why such an opinion was not obtained, and explain the basis
for your
conclusions. If you relied on an opinion of counsel, then counsel
should be named.
Transfers of Cash within the Group, page 11
8. Please disclose your intentions to settle amounts owed under the VIE
agreements. Please
also quantify the amounts of transfers, dividends and distributions
between the holding
company, its subsidiaries, and consolidated VIEs, or to investors.
Please also provide
cross-references to the condensed consolidating schedule and the
consolidated financial
statements.
9. 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, your subsidiaries, or the
consolidated VIEs by the
PRC government to transfer cash. Please provide cross-references to
these other
discussions.
10. Please expand your disclosure regarding the inability of MOGU and its
subsidiaries to
make direct capital contributions to the VIEs. Provide a
cross-reference of your
discussion of limitations on your ability to transfer cash between
you, your subsidiaris, the
consolidated VIEs or investors to your discussion of this issue in
your summary risk
factors and risk factors sections, as well.
11. To the extent you have cash management policies that dictate how funds
are transferred
between you, your subsidiaries, the consolidated VIEs 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.
Summary of Risk Factors, page 13
12. In your summary of risk factors, discuss the risks 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
Qi Chen
MOGU Inc.
September 13, 2022
Page 4
China-based issuers, which could result in a material change in your
operations and/or the
value of your securities. Please revise the first summary risk factor
on page 14 to state
that the risks could cause the value of your securities to
significantly decline or be
worthless. Please note that each summary risk factor should have a
cross-reference to the
relevant risk factor that includes the title of the relevant risk
factor.
Risk Factors
Risks Related to Our Corporate Structure
If the PRC government finds the agreements that established the structure for
our operations in
China do not comply..., page 34
13. Please revise your risk factor to describe the impact on your
securities if the PRC
government determines that the contractual arrangements constituting
part of the VIE
structure do not comply with PRC regulations, specifically that they
may decline in value
or become worthless.
Risks Related to Doing Business in China, page 38
14. Please expand your disclosure regarding 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 to
acknowledge the risk that
any such action could cause the value of your securities to
significantly decline or be
worthless.
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 Scott Stringer at 202-551-3272 or Adam Phippen at
202-551-3336 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Alyssa Wall at 202-551-8106 or Lilyanna Peyser at 202-551-3222 with any
other
questions.
FirstName LastNameQi Chen Sincerely,
Comapany NameMOGU Inc.
Division of
Corporation Finance
September 13, 2022 Page 4 Office of Trade &
Services
FirstName LastName