Samsung Electronics CEO Resigns

The chief executive of Samsung Electronics
resigned Friday, saying the South Korean tech
giant was facing an “unprecedented crisis ” ,
even as it flagged record third -quarter profits .

Kwon Oh -Hyun’ s resignation comes as the
company struggles to overcome a bribery
scandal that sent Lee Jae- Yong , its de- facto
head and heir to the Samsung empire, to jail .
“As we are confronted with unprecedented
crisis inside out , I believe that time has now
come for the company (to) start anew, with a
new spirit and young leadership to better
respond to challenges arising from the rapidly
changing IT industry ” , Kwon said.

“Fortunately , the company is now producing
best-ever results but this is merely a fruit of
decisions and investment made in the past ”, he
said in a statement.

South Korea ’s largest company has been
seeking to move past a bribery scandal that
saw Lee thrown into jail , and to overcome a
damaging recall last year of its flagship Galaxy
Note 7 smartphone over exploding batteries.
Lee, who was found guilty in August of bribery,
perjury and other charges relating to payments
made by Samsung to the secret confidante of
ousted president Park Geun – Hye, is appealing
his five-year sentence and says he is innocent .
Kwon’s sudden departure may be a calculated
legal tactic to seek a softer punishment for Lee,
said Shim Jung -Taik , an author of several
books on Samsung and its corporate culture.
“Lee’s lawyers may argue that Samsung, with
the veteran Kwon gone , needs its vice
chairman back more than ever to lead the
firm,” he said, adding that the tactic had often
been used by other family- run South Korean
business empires.

One analyst who declined to be named said the
departure of the 64 -year- old Samsung veteran
may signal a broader reshuffle at the top .
“Samsung’s CEO -level leadership has remained
largely unchanged for past three years, which is
like an eternity in the fast- changing tech
industry, ” said the analyst.

The group has not made any radical changes in
its leadership since 2014 when the current
chairman Lee Kun -Hee suffered a heart attack
that left him bedridden

– Profits up –
Friday’ s personnel announcement came shortly
after the company said it was expecting to log
14.5 trillion won ( $ 12.8 billion ) in operating
profits for the July- September quarter, an all-
time record and nearly three times the 5. 2
trillion won of the same period a year earlier.
Sales are expected to have surged 29. 65
percent on -year to 62 trillion won , with the
booming semiconductor business boosting the
company’s bottom line.

Samsung did not announce the performance
estimates of each business division but its
semiconductor business is widely believed to
have contributed greatly to the record- beating
The company is set to release its final earnings
report on October 31 .
“The results are good ones that largely meet
market expectations,” Kwon Sung -Ryul of
Dongbu Securities told AFP.
“The company has been riding a global
semiconductor boom ,” he said , adding the
semiconductor business alone is believed to
have contributed 10 trillion won to the
operating profit .
The company’s main products — DRAM and
NAND memory chips used in smartphones —
have also seen an increase in shipments and
Rising sales of its flagship Galaxy S8 and
Galaxy Note 8 smartphones were also believed
to have bolstered the profitability of the
mobile division, analysts said.
Yonhap Infomax data , based on research from
21 securities firms, also showed Samsung is
expected to post an operating profit of 16
trillion won in the fourth quarter , up 74
percent from a year earlier .
Doh Hyun- woo, analyst at Mirae Asset Daewoo
Securities, said in a report that the release of
new models, including Apple ’s iPhone X , could
weigh on Samsung’s mobile sales, but will also
help its smartphone parts business.
The consumer electronics division will also
benefit from strong seasonal demand , he
Analysts said the company was likely to post
another all -time high quarterly operating profit
of somewhere between 15 and 17 trillion won
in the October -December period as IT/mobile
business is expected to contribute greater
earnings as well .
Shares in Samsung Electronics closed 1. 46
percent down Friday on heavy profit- taking. 

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