The Stock Exchange of Thailand (SET) is warning investors to study Nusasiri Plc (NUSA) investment information carefully after its auditor raised an issue about the complexity of the structure of a hotel Nusasiri intended to buy, as well as its business licence in Germany.
The bourse instructed Nusasiri to clarify information in its first-quarter financial statements after the auditor cited matters related to the complexity of the hotel seller’s structure, as well as the rights, trademark and other business licences in Germany.
The auditor has expressed this opinion since the 2021 financial statements and the SET previously required the company to clarify additional information for statements that year and in the third quarter of 2022, especially regarding hotel acquisitions in Germany, the SET said in a statement yesterday.
“These are continuing issues that the SET previously required Nusasiri to clarify. In addition, a subsidiary has changed the form and conditions of its hotel acquisition several times,” noted the bourse.
The SET is requiring clarification via its disclosure system by July 25.
Investors are advised to study Nusasiri’s financial statements and monitor the company’s clarification, the statement added.
According to the SET, Nusasiri entered into a contract to purchase a hotel in Germany in January 2021, but subsequently the company shifted to purchase the shares of the hotel’s owner, paying 624 million baht as a deposit.
However, in May 2023, Nusasiri cancelled the contract and required the seller to refund the deposit within two years without interest.
“The SET requires Nusasiri to clarify information about the change on the form and investment conditions for the hotel, the progress and timeline for due diligence, the reason why the company does not immediately request a refund of the deposit, and the company’s action plan to support the auditor in being able to obtain reasonable assurance for this transaction,” noted the statement.
Nusasiri was also asked to clarify information about its transaction related to More Money Entertainment Co Ltd. In July 2022, Nusasiri bought 30% of More Money Entertainment, of which half of the shares are owned by a subsidiary of More Return Plc.
Nusasiri paid a deposit to More Money for the transaction, but then later cancelled the investment and sold More Money’s shares to another buyer.
Nusasiri did not receive any payment and More Money requested an extension period to return the money for the capital increase and deposit, totalling 57.5 million baht, for another 90 days, due on July 29 and Aug 11, 2023, respectively.
The SET asked Nusasiri to clarify the reason for the capital increase and deposit return extension, the company’s procedure for refunds on due dates, and the effect of an extension on the group’s liquidity.
Nusasiri is also requested to explain to the SET its ability to continue operations as the auditor noted the group has posted operating losses for consecutive years.
As of March this year, the group had significant liabilities owed to the contractor of Nusa Legend Siam for 1.72 billion baht.
China International Economic and Trade Arbitration Commission (CIETAC) ruled Nusasiri settle its debt in the case, but Nusasiri filed a petition to revoke the final judgement issued by CIETAC.
The bourse required the company to clarify the progress of this
dispute, including the effect of a potential default on other liabilities, such as debentures or loans from financial institutions.
“As these three issues may affect the company’s financial positions and liquidity, the SET asks Nusasiri’s board of directors and the audit committee to explain the impact and whether these transactions are for the group’s and the shareholders’ best interests,” said the statement.
