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

REC Silicon's minority shareholders have warned of legal action against the Norwegian silicon materials maker, with Korea's Hanwha Group currently the largest shareholder of the Norway-based company.

Their latest move came after a sharp decline in REC's stock price earlier this year in the aftermath of its abrupt announcement at the end of last year that it would suspend polysilicon production at its U.S. manufacturing plant in Moses Lake, Wash., and cancel a 10-year contract with Hanwha to supply the raw material for solar panels.

"Three of us will also meet with a lawyer to review legal aspects related to the situation," a group of REC's minority shareholders wrote online on Jan. 26.

"We are preparing for all possible outcomes and are considering measures such as legal action, convening an extraordinary general meeting (EGM), initiating an investigation, strategic media engagement and strengthening dialogue with other shareholders," the group added.

The action group was organized after the announcement of REC's factory shutdown dragged down its stock price by 50 percent from 3.59 Norwegian krone ($0.32) to 1.79 Norwegian krone on the first trading day of the year.

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.

Questioning REC's decision-making process, the minority shareholders have called for an EGM.

They also sent a letter to REC requesting a meeting with its board before the presentation of fourth-quarter earnings, which is slated for Feb. 6.

REC's five-member board includes two of Hanwha's senior executives, who serve as the chair and the deputy chair. The Norwegian firm's chief financial officer and the chief strategy officer, as well as two other executives managing its U.S. operations, previously worked for Hanwha.

The minority shareholders have asked for the election of new board members to represent their interests.

"We will demand at least one new board member, though it seems likely that as many as three may be required," the action group said.

REC was unavailable for comment on this issue, while Hanwha has distanced itself from the Norwegian firm.

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.

Speculation persists that Hanwha may unload its shares in REC, although the Korean firm recently provided the Norwegian firm with a $40 million loan to help with the closure of its Moses Lake facility.