REC Silicon's plant in Moses Lake, Wash. / Courtesy of REC Silicon

Hanwha is facing strong opposition from Norwegian shareholders of REC Silicon.

They claim that REC Silicon's board members, who are from the Korean company, which is the largest shareholder of the Norwegian silicon materials maker, have failed to share their decision-making process with smaller shareholders, resulting in financial losses for them.

They began protesting after REC's stock price dropped by 50 percent on the first trading day of the year, following the Norwegian firm's announcement on Dec. 30 that it would suspend polysilicon production at its U.S. manufacturing plant in Moses Lake, Washington, and cancel a 10-year contract with Hanwha to supply the raw material for solar panels.

It was revealed later that Hanwha decided to source polysilicon from a Malaysian plant of OCI Holdings, another Korean solar energy company, due to the lower quality of REC's products.

Hanwha's headquarters in Seoul / Courtesy of Hanwha

"The shutdown of the Moses Lake facility follows numerous, previously disclosed efforts to improve the level of some key impurities that resulted primarily from the post-reactor product finishing and handling systems," REC Silicon said in a press release.

"The company was unsuccessful in its attempts to fully rectify the issues and ultimately received an unsuccessful qualification test."

In response, a group of REC's Norwegian minority shareholders launched a website earlier this month to seek further clarification regarding the management's decision to shut down its U.S. plant.

Questioning the independence of REC's board of directors from Hanwha, the action group called for an extraordinary general meeting (EGM) to investigate whether the Norwegian firm has fulfilled its disclosure obligations to shareholders equally and whether it has properly managed shareholder funds.

"This includes examining potential asymmetric access to information between Hanwha and minority shareholders," the group said. "At the EGM, we will propose the election of new board members to represent minority shareholders' interests."

Two of Hanwha's senior executives — Jun Tae-won and Chung Joo-yong — currently serve as the chair and the deputy chair of REC's board of directors. In addition, REC's chief financial officer and the chief strategy officer are also former executives of Hanwha.

Hanwha Vice Chairman Kim Dong-kwan, the oldest son of Hanwha Chairman Kim Seung-youn, was also previously the deputy chair of REC's board of directors. He has been leading the Korean conglomerate's solar power business in the United States.

The Korean conglomerate, however, distanced itself from the Norwegian firm.

"Although it is true that we hold a stake in REC, the company functions more as a supplier, not a subsidiary or an affiliate. As a result, we have not been involved in its internal issues," said a spokesperson for Hanwha Solutions Q Cells Division, which oversees the conglomerate's solar power business.

Since 2022, Hanwha Solutions has remained the largest shareholder of REC with a 21.33 percent stake. Hanwha Corp., the Korean conglomerate's holding company, also owns a 12 percent stake in REC.

The Norwegian minority shareholders claimed that they had gathered proxies from REC stakeholders who own about 13 percent of the company's shares as of last Friday. In Norway, shareholders representing at least 5 percent of a company's shares have the right to demand an extraordinary general meeting.

Some believe that the minority shareholders may collaborate with Gilchrest Berg, an American investor who owns a 5.37 percent stake in REC through his company, Water Street Capital.