Samsung Electronics CEO Announces Resignation Amid 'Unprecedented Crisis'

Samsung Electronics CEO Announces Resignation Amid 'Unprecedented Crisis'

Samsung Electronics CEO Announces Resignation Amid 'Unprecedented Crisis'

The CEO of Samsung Electronics Kwon Oh-Hyun resigned Friday, saying the South Korean tech giant was facing an "unprecedented crisis", even as it expected profits to hit an all-time high in the third quarter.

The release of new models, including the iPhone X by rival Apple Inc could weigh on Samsung's mobile sales, but will also help its smartphones parts business, Mirae Asset Daewoo Securities Co analyst Doh Hyun-woo said in a report.

Lee's father, Lee Kun-hee, who still retains the chairman title, has been bedridden since 2014 due to health problems, and Lee Jae-yong was sentenced to five years in prison in August for bribing former President Park Geun-hye. Kwon's departure from Samsung makes way for a new management that can finish the company's delayed reshuffle of its top executives.

"It is something I had been thinking long and hard about for quite some time", Kwon said in a Samsung announcement.

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"As we are confronted with unprecedented crisis inside and 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", he added. He is expected to deliver his letter of resignation to Lee Jae-yong and the board of directors soon. "It has not been an easy decision, but I feel I can no longer put it off", Kwon said in an English statement.

Samsung has two other CEOs, each overseeing its mobile phone business and home appliance division.

"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. He also has served as the CEO of Samsung Display since 2016. The company was expecting profits of about 14.5 trillion Korean won ($12.8 billion).

Earlier Friday, Samsung said its July-September operating profit almost tripled over a year earlier to a new record, putting it on track to report its best annual financial results.

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Lee was arrested for bribery charges in February 2017.

Chung Sun-sup, chief executive officer of research firm Chaebul.com, expressed surprise and curiosity about the Kwon's decision.

Kwon's resignation won't take into effect until March 2018, but Samsung will now have to find replacements to fill in the vacant roles in the company.

Samsung has announced the imminent departure of its CEO even as the company said it expected to post record profits of almost $13 billion in the third quarter.

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Shares in Samsung Electronics yesterday closed 1.46 percent down on heavy profit-taking.

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