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United States securities and exchange commission logo
December 17, 2021
Tao Xu
Chief Financial Officer
KE Holdings Inc.
Oriental Electronic Technology Building
No. 2 Chuangye Road, Haidian District
Beijing 1000086
People's Republic of China
Re: KE Holdings Inc.
Form 20-F for the
Fiscal Year Ended December 31, 2020
Filed April 6, 2021
File No. 001-39436
Dear Mr. Xu:
We have reviewed your October 25, 2021 response to our comment
letter 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. Unless we note otherwise, our references to prior comments are
to comments in our
September 20, 2021 letter.
FORM 20-F FOR THE FISCAL YEAR ENDED DECEMBER 31, 2020
Item 3. Key Information, page 4
1. We have considered your
response to comment 1. Similar to your proposed disclosures to
be included in Item 3,
clearly disclose at the outset of Part I, that you control and receive
economic benefits of KE
Holding's business operations through VIE agreements and that
those agreements are
designed to provide your WFOE with the power, rights, and
obligations equivalent
in all material respects to those it would possess as the principal
equity holder of the
VIE and that you are the primary beneficiary of the VIE. Your
disclosures should also
highlight that you or your investors do not have an equity
ownership in, direct
foreign investment in, or control through such ownership/investment
Tao Xu
FirstName LastNameTao Xu
KE Holdings Inc.
Comapany17,
December NameKE
2021 Holdings Inc.
December
Page 2 17, 2021 Page 2
FirstName LastName
of the VIE. As such, when describing the design of the VIE agreements
and related
outcome, refrain from implying that the VIE agreement is equivalent to
an equity
ownership in the business of the VIE. Any references to control or
benefits that accrue to
you because of the VIE should be limited to and clearly describe the
conditions you met
for consolidation of the VIE under U.S. GAAP and your disclosure
should clarify that, for
accounting purposes, you will be the primary beneficiary. In addition,
your disclosure
should note, if true, that the agreements have not been tested in a
court of law.
2. We have considered your response to comment 2. Please revise further
to include
indication that rules and regulations in China can change quickly with
little advance notice
and highlight the risk that the Chinese government may intervene or
influence your
operations at any time.
3. We have considered your response to comment 3. Please further expand
your disclosures
to affirmatively address whether you are required to and have obtained
the necessary
permissions from the CSRC, CAC or any other entity that is required to
approve of the
VIE s operations and address the consequences to you and your
investors if you
inadvertently conclude that approvals are not required, or applicable
laws, regulations, or
interpretations change and you are required to obtain approval in the
future.
4. We have considered your response to comment 4. Please include similar
disclosure at the
outset of Part I. In that regard, provide a description of how cash is
transferred through
your organization and disclosure regarding your intentions to
distribute earnings or settle
amounts owed under the VIE agreements. State whether any transfers,
dividends, or
distributions have been made to date.
5. We have considered your response to comment 5. We note that activity
of the VIE is
reflected in the line items titled "Investment in subsidiaries and
VIEs" and "Share of
income (loss) of subsidiaries and VIEs" in the parent's financial
statements. Please
further expand your disclosures to provide a roll-forward of such line
items.
6. We have considered your response to comment 6. Where you describe
delisting of
securities as a consequence of the inability of the PCAOB to inspect
or fully investigate an
auditor, please also state that trading in securities would be
prohibited. Also disclose that
in June 2021, the Senate passed the bill known as the Accelerating
Holding Foreign
Companies Accountable Act, which would reduce this time period from
three years to two
years. Please also revise to include a discussion of the amendments
adopted by the SEC
to finalize rules related to the Holding Foreign Companies Accountable
Act.
7. Please disclose at the onset of Item 3 whether you are required to
obtain any approvals to
offer securities to foreign investors, whether you have received such
approvals and the
consequences to you and your investors if you do not receive or
maintain the approvals,
inadvertently conclude that such approvals are not required, or
applicable laws,
regulations, or interpretations change and you are required to obtain
approval in the
future.
Tao Xu
KE Holdings Inc.
December 17, 2021
Page 3
Part I, page 4
8. We have considered your response to comment 7. Please further revise
to explicitly state
that your structure involves unique risks to investors. In addition,
we note your
disclosure indicating that the VIE structure is used to replicate
foreign investment in
China-based companies. We note, however, that the structure provides
contractual
exposure to foreign investment in such companies rather than
replicating an investment.
Please revise your disclosure accordingly.
9. We have considered your response to comment 8. Please expand your
disclosure at the
outset of Part I to address with additional detail how recent
statements and regulatory
actions by China s government, such as those related to data
security or anti-monopoly
concerns, has or may impact the company s ability to conduct its
business, accept foreign
investments, or list on an U.S. or other foreign exchange.
10. We have considered your response to comment 9 and reissue the comment
in part. Please
refrain from using terms such as we or our when describing
activities or functions of a
VIE. In that regard, refrain from using the term "our VIE" when
referencing KE Holdings,
Inc. and revise your disclosures accordingly.
You may contact Babette Cooper, Staff Accountant at 202-551-3396 or
Wilson Lee, Staff
Accountant at 202-551-3468 if you have any questions.
FirstName LastNameTao Xu Sincerely,
Comapany NameKE Holdings Inc.
Division of
Corporation Finance
December 17, 2021 Page 3 Office of Real
Estate & Construction
FirstName LastName