The SEC had an observation on the accounting of the change in NRF Group’s shareholding proportion in Kairous Asia Limited (KAL), which was resulted from the repayment of loan and accrued interest through KAL’s ordinary shares. It was initially treated as a business combination. However, the group of entities under KAL was established with the purpose for merging with another business (Special Purpose Acquisition Company or SPAC). As of the acquisition date, no merger with a target company has occurred, and the financial statements of KAL Group primarily consist of cash in trust under the SPAC and other non-current liabilities. Therefore, KAL does not meet the definition of a “business” according to the relevant financial reporting standards.  

In addition, it was found that the SPAC-related process has been delayed from the planned schedule, which may indicate potential impairment of assets related to the SPAC structure investments in the separate financial statements, such as investments in subsidiaries, loans to subsidiaries, and accrued interest. The recoverable amount of these items depends on the future success of the investment under the SPAC structure.  

Therefore, the SEC has notified NRF to (1) adjust the accounting of the change in the shareholding proportion in KAL as the acquisition of an asset or a group of assets according to the relevant financial reporting standards, and (2) consider the adequacy and appropriateness of asset impairment in the separate financial statements. NRF is also required to rectify the financial statements for the year 2024 and the first quarter of 2025 and submit the rectified financial statements that have been audited and reviewed by the auditor to the SEC and simultaneously report the disclosure of related information under Section 56 of the Securities and Exchange Act B.E. 2535 (1992). Additionally, the rectified financial statements and the report of the rectification must be disclosed publicly via the SETLink Electronic System by 30 June 2025.