Norway-based polysilicon and silicon gas producer REC Silicon ASA (OSE:RECSI) today gave reasoning as to some key appointments within its top management and board of directors, shortly after a substantial investor questioned the decisions.
At the end of September, months after South Korea’s Hanwha Group became the company’s largest shareholder through Hanwha Solutions Corp (KRX:009830) and Hanwha Corp (KRX:000880), REC Silicon scheduled an extraordinary general meeting (EGM) for October 21, 2022, at which shareholders are supposed to adopt certain proposals for the election of board members.
The subjects of the votes will be Tae Won Jun as chair and Dong Kwan Kim as deputy chair, both of whom are linked to Hanwha, and Vivian Bertseka. With current director Renate Oberhoffer-Fritz keeping her spot, this means that Hanwha representatives will occupy two out of four seats on the board.
On Friday, REC Silicon said it “is pleased with the proposals from the nomination committee, and considers that this will give the company a well-composed board with strong competence, experience and diversity.” It added that all three nominees are experts in their fields.
The company also explained that the recent appointment of Kurt Levens as its new CEO is the result of a search that began before Hanwha acquired its first shares in the firm.
"The board strongly believes that the current CEO and the current management team are the right persons to lead the Company through the next phase of its development. The Company has been through a long period without production at Moses Lake and will now finally be able to resume normal operations under leadership of the competent management team," REC Silicon stressed.
While the company did not give a reason for its decision to provide these clarifications, the statement comes a few days after one of its significant shareholders, Lodbrok Capital LLP, expressed governance concerns and its disagreement with the idea of Hanwha negotiating a contract for the vast majority of the company’s production, being just a one-third shareholder.
In its letter to the company’s board of directors, Lodbrok recommended that REC Silicon immediately postpones the upcoming EGM in order to consider additional board candidates. The latest statement from REC Silicon’s board of directors did not entertain the idea of pushing back the date of the meeting.
Lodbrok also urged Hanwha to either accept having a minority of the board seats and appropriate oversight for any contract negotiations or to increase its equity interest in the polysilicon producer.
“The board respects and is committed to comply with good standards of corporate governance, and this firm commitment is also shared by the nominated board members. Accordingly, all board appointments and related procedures are carried out in accordance with Norwegian statutory rules. The same commitment also applies in the case of related party transactions, if any, and the board of directors are mindful of the need to ensure that all transactions are conducted at arms’ length basis and in the best interests of the Company and all of its shareholders,” REC Silicon’s statement reads.
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The Moses Lake polysilicon factory. Source: REC Silicon. License: All Rights Reserved.
