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

Gladys Abbott
October 14, 2017

"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 in the rapidly changing IT industry", Kwon Oh-hyun, 65, said in a letter to employees.

The prosecutors and Samsung lawyers sparred Thursday during a first hearing by the appeals court on the effort by Lee Jae-yong, Samsung's vice chairman and de facto leader, to have his five-year prison sentence overturned.

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

Lee was arrested for bribery charges in February 2017.

"Now, the company needs a new leader more than ever and it is time for me to move to the next chapter of my life", Kwon said. "It has not been an easy decision, but I feel I can no longer put it off", Kwon said in an English statement. Mark Newman, senior research analyst at Sanford C. Bernstein said Kwon's top deputies, President J.K. Shin, who is in charge of mobile products, or Kim Ki-nam, president of Samsung's semiconductor business, may succeed Kwon. "Nobody wants to be the chief of Samsung at a time like this; it's too risky", said Park.

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"I am anxious about a leadership vacuum at a time when Lee is absent from management", said Mr Chung Sun Sup, chief executive of research firm, following Mr Kwon's announcement.

Kwon added the company is facing a grave situation despite it making record-breaking earnings.

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

Shares in Samsung Electronics closed 1.46 percent down Friday on heavy profit-taking. Kwon was expected to take a bigger role after the arrest of scion and heir apparent of Samsung Group, Jay Y Lee. He also has served as the CEO of Samsung Display since 2016. The leadership shakeups appear to have had little impact on Samsung's business, however, with the company forecasting a banner third quarter of $12.81 billion in operating profit.

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