Samsung Electronics CEO resigns, says company is in "unprecedented crisis" ars_ab.settitle(1186199)

Ivan Schwartz
October 14, 2017

That crisis is believed to be related to the ongoing bribery scandal surrounding Samsung, which recently saw the arrest of the company's heir and vice chairman Lee Jae-yong (also known as Jay Y Lee).

According to the company, Kwon will also resign as CEO of Samsung Display.

Samsung was closely tied to the political corruption of South Korea's former president - also its first female president - with vice chairman Lee enjoying a sentence of five years in prison for his role in the scandal.

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 almost three times the 5.2 trillion won of the same period a year earlier.

While expressing concern that the company was "confronted with unprecedented crisis inside out", alluding to the conviction of its leader, Kwon said he hopes his resignation can be a good opportunity for the company to turn things around and make bold attempts at innovation.

Experts equally noted that the company was making record earnings right now, but this is the fruit of past decisions and investments and that the firms are not able to even get close to finding new growth engines by reading future trends right now.

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Kwon will serve the company until his successor is found and the new management team is set.

"Kwon himself might have thought over the issue for a long time", a Samsung spokesperson said, "but the notice itself was a surprise internally as well".

But Samsung did not celebrate the news for long, following up the rosy earnings guidance by announcing the resignation of a top executive. Lee Jae-yong was widely expected to succeed his father as head of the group.

Kwon joined the company in 1985 as a researcher of the company's Semiconductor Research Institute in the United States.

Samsung Electronics says its third-quarter profit likely surged almost three-fold over a year earlier to a new record high. Despite the trial, the company's business has remained robust, helped by strong demand for memory chips.

Other reports by GizPress

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