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Samsung CEO Steps Down Despite Record Profits, Warns Of "Unprecedented Crisis"

Zero Hedge Friday, 13 October 2017 ()
Samsung CEO Steps Down Despite Record Profits, Warns Of Unprecedented CrisisIn a surprise move - and just *months after the grandson of the company’s founder was jailed for corruption* - the CEO of Samsung, Kwon Oh-hyun has resigned 'to make way for new leadership'. In an odd turn of events,* despite record profits, Kwon warned the company faces an "unprecedented crisis."*

Kwon had emerged as the public face of Samsung Electronics* after Jay Y. Lee, grandson of the company’s founder, was detained on corruption charges and then sentenced to five years in prison in August *amid a scandal that brought down South Korea’s president.

The share price slipped on the news...

As Bloomberg reports, Kwon Oh-hyun, who also serves as co-vice chairman, announced his retirement on Friday as the Suwon-based *company reported record operating income of 14.5 trillion won ($12.8 billion) *on booming demand for displays and memory chips.

*He said the company faces an “unprecedented crisis” despite the financial success*.

*“As we are confronted with unprecedented crisis inside out, I believe that time has now come for the company start anew, with a new spirit and young leadership to better respond to challenges arising from the rapidly changing IT industry,”* Kwon said in the statement.

While the latest financial results show Samsung’s business units operating smoothly, that in itself may present risks for Kwon, said Park Ju-gun, who tracks corporate executives at CEOScore.

*“Nobody wants to be the chief of Samsung Electronics at a time like this; it’s too risky,”* said Park.

*“It puts that person at odds with the controlling family. Only when he is in the shadow is he playing his role properly.”*

Despite the trial, the company’s business has remained robust, helped by strong demand for memory chips.

*“It’s the chip prices that are driving up the profit rather than the sales volumes,”* said Park Kang-ho, an analyst at Daishin Securities. “We’re expecting an operating profit of about 16 trillion won in the next quarter.”
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News video: Samsung boss resigns over "unprecedented crisis"

Samsung boss resigns over "unprecedented crisis" 01:04

Samsung Electronics CEO Kwon Oh-hyun announces shock resignation as the company's profits surge. Sara Hemrajani reports.

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