SecProbe.io

CORRESP
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filename1.htm

April
10, 2023

Ms.
Cara B. Wirth and Ms. Pamela Long

Division
of Corporation Finance

Securities
and Exchange Commission

100
F Street, NE, Washington, D.C. 20549

    Re:
    Alset
    Capital Acquisition Corp.

    Form
    14A (Preliminary Proxy Statement)

    Filed
    on March 24, 2023

    Supplemental
    Response Letter to Oral Comments received on April 7, 2023

Dear
Ms. Wirth and Ms. Long:

This
letter is being furnished in response to the oral comments of the staff (the “Staff”) of the Division of Corporation Finance
of the Securities and Exchange Commission (the “Commission”) issued on April 7, 2023 with respect to a Preliminary Proxy
Statement filed with the Securities and Exchange Commission on March 24, 2023 (the “Preliminary Proxy Statement”) of Alset
Capital Acquisition Corp. (the “Company”, “we” or “us”).

This
letter provides the Company’s responses to the Staff’s oral comments issued on April 7, 2023. A brief synopsis of the Staff’s
oral comments are outlined below in “1.” and “2.”, followed by the responses of the Company and additional disclosure
the Company plans on including in the next filing of the definitive proxy statement.

Form
14A Filed on March 24, 2023

    1.
    The
    Staff has asked us to address the risk that the issuer may be deemed an unregistered Company under the Investment Company Act of
    1940 (the “Investment Act”).

    Response:
    In response to this oral comment issued by the Staff, we have notified the Staff that we will be including disclosure which informs
    the public of the possibility that we may be deemed an unregistered Company under the Investment Company Act of 1940. We are also
    advising the Staff that we intend to amend the Definitive Proxy Statement to provide that the Company proposes to extend its life
    for an additional six months as opposed to the additional one year originally sought in the Preliminary Proxy Statement. Similar
    disclosure as outlined below will be included in the next filing of our definitive proxy statement:

    Disclosure:

    If
    Alset were deemed an “investment company” under the Investment Company Act of 1940 (the “Investment Act”),
    as amended (the “Investment Company Act”), we may be required to institute burdensome compliance requirements and our
    activities may be restricted, which may make it difficult for us to complete the Business Combination.

    If
    we are deemed to be an investment company under the Investment Act, our activities may be restricted, including:

    ●
    restrictions on the nature of our investments;

    ●
    restrictions on the issuance of securities, each of which may make it difficult for us to complete the Business Combination;
    and

    *the
    requirement to liquidate.

    In
    addition, we may have imposed upon us burdensome requirements, including:

    ● registration
    as an investment company with the SEC;

    ● adoption
    of a specific form of corporate structure; and

    ● reporting,
    record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are currently not subject
    to.

    In
    order not to be regulated as an investment company under the Investment Act, unless we can qualify for an exclusion, we must ensure
    that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our activities do
    not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of
    our assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis.

    We
    do not believe that our principal activities and the Business Combination will subject us to the Investment Company Act. To this
    end, the proceeds held in the trust account may only be invested in United States “government securities” within the
    meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting
    certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury
    obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting
    the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for
    the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to
    avoid being deemed an “investment company” within the meaning of the Investment Act. An investment in our securities
    is not intended for persons who are seeking a return on investments in government securities or investment securities. The Trust
    Account is intended as a holding place for funds pending the earliest to occur of either: (i) the completion of our initial business
    combination (which shall be the Business Combination should it occur); (ii) the redemption of any public shares properly tendered
    in connection with a shareholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance
    or timing of our obligation to provide holders of our Class A Shares the right to have their shares redeemed in connection with our
    initial business combination (which shall be the Business Combination should it occur) or to redeem 100% of our public shares if
    we do not complete our initial business combination within 21 months from the closing of our initial public offering or (B) with
    respect to any other provision relating to the rights of holders of our Class A Shares; or (iii) absent an initial business combination
    (which shall be the Business Combination should it occur) within 21 months from the closing of our initial public offering, our return
    of the funds held in the trust account to our public shareholders as part of our redemption of the public shares. If we do not invest
    the proceeds as discussed above, we may be deemed to be subject to the Investment Act. If we were deemed to be subject to the Investment
    Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and
    may hinder our ability to complete a business combination. In addition, we could be required to liquidate. If we are unable to complete
    the Business Combination, our Public Shareholders may only receive their pro rata portion of the funds in the Trust Account that
    are available for distribution to Public Shareholders, and our warrants and rights will expire worthless.

    On
    March 30, 2022, the SEC issued proposed rules relating to, among other matters, the extent to which SPACs could become subject to
    regulation under the Investment Company Act. The SEC’s proposed rule under the Investment Act would provide a safe harbor for
    SPACs from the definition of “investment company” under Section 3(a)(1)(A) of the Investment Company Act, provided that
    they satisfy certain conditions that limit a SPAC’s duration, asset composition, business purpose and activities. The duration
    component of the proposed safe harbor rule would require a SPAC to file a report on Form 8-K with the Commission announcing that
    it has entered into an agreement with the target company (or companies) to engage in an initial business combination no later than
    18 months after the effective date of the SPAC’s registration statement for its initial public offering. The SPAC would then
    be required to complete its initial business combination no later than 24 months after the effective date of its registration statement
    for its initial public offering. Although that proposed safe harbor rule has not yet been adopted, the SEC has indicated that are
    serious questions concerning the applicability of the Investment Company Act to a SPAC that does not complete its initial business
    combination within the proposed time frame set forth in the proposed safe harbor rule.

    The
    proposed safe harbor rule has not yet been adopted, and one or more elements of the proposed safe harbor rule may not be adopted
    or may be adopted in a revised form. However, if we were deemed to be an investment company for purposes of the Investment Company
    Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and
    could increase the costs and time needed to complete a business combination or impair our ability to complete a business combination.
    If we have not completed our initial business combination within the required time period, our public shareholders may receive only
    approximately $10.12 per share, plus interest, or less in certain circumstances, on the liquidation of our trust account and our
    warrants and rights will expire worthless.

    2.
    The
    Staff has asked us to address the risk regarding the Company not being able to complete a business combination, specifically, a risk
    related to the Committee on Foreign Investment in the United States (“CFIUS”).

                                                                              Response:
    In response to this oral comment issued by the Staff, we have notified the Staff that we will also be including disclosure from
    page 82 of Amendment No.1 to Form S-4, which was filed on November 25, 2022, in our next filing of the definitive proxy statement
    regarding the risk that the proposed business combination we hope to consummate will be subject to a CFIUS review; the scope of which
    was expanded by the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”), to include certain non-passive,
    non-controlling investments in sensitive U.S. businesses and certain acquisitions of real estate even with no underlying U.S business.
    We respectfully note, that we do not believe that the nature of the Company’s business contains anything that would be considered
    “sensitive businesses” or raise concerns regarding foreign acquisitions of U.S. Real estate or any other activities that
    raise “national security concerns”. Notwithstanding, , similar disclosure as outlined below will be included in the
    filing of our definitive proxy statement:

    Disclosure:

    We
    may not be able to complete an initial business combination with a U.S. target company since such business combination may be subject
    to U.S. foreign investment regulations and review by a U.S. government entity such as the Committee on Foreign Investment in the
    United States (CFIUS), or ultimately prohibited.

    Certain
    of our directors are citizens of countries other than the United States. It is possible that the Business Combination may be subject
    to a CFIUS review, the scope of which was expanded by the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”),
    to include certain non-passive, non-controlling investments in sensitive U.S. businesses and certain acquisitions of real estate
    even with no underlying U.S. business. FIRRMA, and subsequent implementing regulations that are now in force, also subjects certain
    categories of investments to mandatory filings. If the Business Combination falls within CFIUS’s jurisdiction, we may determine
    that we are required to make a mandatory filing or that we will submit a voluntary notice to CFIUS, or to proceed with the business
    combination without notifying CFIUS and risk CFIUS intervention, before or after closing the business combination. CFIUS may decide
    to block or delay our business combination, impose conditions to mitigate national security concerns with respect to such business
    combination or order us to divest all or a portion of a U.S. business of the combined company without first obtaining CFIUS clearance,
    which may limit the attractiveness of or prevent us from pursuing certain business combination opportunities that we believe would
    otherwise be beneficial to us and our shareholders. As a result, the pool of potential targets with which we could complete a business
    combination may be limited and we may be adversely affected in terms of competing with other special purpose acquisition companies
    which do not have similar foreign ownership issues.

    Moreover,
    the process of government review, whether by the CFIUS or otherwise, could be lengthy and we have limited time to complete our business
    combination.

If
you need any additional information or have any follow up questions, please feel free to contact Darrin M. Ocasio of Sichenzia Ross Ference
LLP at 212-398-1493.

    Sincerely,

    By:
    /s/
    Heng Fai Ambrose Chan

    Name:

    Heng
    Fai Ambrose Chan

    Title:
    Chairman
    and Chief Executive Officer