Daqo New Energy Updates on Legal Matters Affecting Operations
Daqo New Energy Corp. (NYSE: DQ), a prominent player in the high-purity polysilicon production sector for the solar industry, has offered new details regarding a legal situation involving its subsidiary, Xinjiang Daqo. This communication serves to keep stakeholders informed about the recent developments in this ongoing litigation.
Background of the Litigation
Earlier this year, Xinjiang Daqo, a fully owned subsidiary of Daqo New Energy, encountered a lawsuit initiated by Xinjiang Xian'an New Materials Co., Ltd. and its associated entity, Xinjiang Dengbo New Energy Co., Ltd. The crux of the case centers around a contract dispute stemming from their prior business relationship, where Xinjiang Daqo had engaged these plaintiffs for silicon core processing services.
Details of the Claims
The plaintiffs sought to terminate their business cooperation agreement with Xinjiang Daqo, while also claiming damages. Initially, they sought over RMB1.9 billion, which was later amended to approximately RMB743 million, focusing primarily on alleged consequential losses. The lawsuit's progression has been communicated at various points through Daqo's regulatory filings.
Court Proceedings and Verdicts
In July 2024, the court issued a verdict which validated the termination of the business agreement. It mandated that Xinjiang Daqo compensate the plaintiffs a total of RMB3.16 million for their legal costs, while dismissing claims for the larger consequential damages.
However, the situation escalated as the plaintiffs chose to appeal this ruling. In March 2025, a second court verdict effectively overturned the first ruling and called for a retrial of the case.
Recent Developments in the Case
The recent retrial verdict has reaffirmed the termination of the agreement and commanded Xinjiang Daqo to pay RMB3.30 million in compensation and legal fees to the plaintiffs while once again rejecting the previous demands for consequential damages. The final ramifications of this litigation on Xinjiang Daqo's operations remain to be seen and are anticipated to be contingent upon any future appeals or rulings.
About Daqo New Energy Corp.
Daqo New Energy Corp. (NYSE: DQ) stands as a leading manufacturer of high-purity polysilicon, essential for the global solar photovoltaic (PV) industry. Established in 2007, the company has developed an impressive nameplate capacity of 305,000 metric tons, positioning itself as a low-cost producer in its field. Daqo supplies high-purity polysilicon to manufacturers who convert it into vital components for solar power solutions such as ingots, wafers, and modules.
The company remains committed to innovating and enhancing the production processes that deliver their products to the market, ensuring sustainability and cost-efficiency in solar energy applications.
Frequently Asked Questions
What is the nature of the lawsuit faced by Daqo New Energy?
The lawsuit revolves around a contract dispute between Xinjiang Daqo and its former business partners over silicon core processing services.
What was the initial compensation claim amount?
The plaintiffs initially sought RMB1.9 billion but later amended it to approximately RMB743 million.
What was the outcome of the first court ruling?
The first ruling upheld the termination of the business agreement and required Xinjiang Daqo to pay RMB3.16 million in legal fees.
How did the second court ruling affect the case?
The second ruling vacated the first ruling and called for a retrial, indicating ongoing legal complexities.
What risks might Daqo New Energy face from this litigation?
The litigation could affect their operations and financial standing, depending on future verdicts and financial liabilities.
