In an official statement released today, tech giant Samsung announced that CEO of Samsung and Vice Chairman Kwon Oh-Hyun has decided to resign from the management, shortly after Jay Y. Lee has been jailed for bribery.
After Lee’s arrest, a number of other key executives of the company left under the bribery scandal and Kwon Oh Hyun was expected to be given an even better post at the company. However, the head of Samsung’s chip and display resigned before his promotion.
Surprisingly, Kwon took this step on the same day Samsung made a record third-quarter operating profit in its memory chip business. Park Ju Gun, head of research firm CEO Score said:
“The timing is nonsensical. Samsung tipped record earnings, it’s going to be better in the fourth-quarter, and all that’s been driven by Mr Kwon’s components business.”
Mr. Kwon played a crucial role in the company’s chip business and apart from being the chairman of the board and board director; he was the head of the components and display business. He was often referred to as “Mr Chip”. He said that it was time to start anew with new spirit and young leadership. He said:
“We are fortunately making record earnings right now, but this is the fruit of past decisions and investments; we are not able to even get close to finding new growth engines by reading future trends right now.”
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New annual profit record
Samsung is about to break its annual profit record this year thanks to the increased sales in memory chips. With record sales of 8 trillion won through June, semiconductors were the top sellers at Samsung this year.
With Toshiba partnering with SK Hynix, its home rival, the world of global chips is about to change. Moreover, other companies have also started research in new areas of technology including artificial intelligence and automobiles.
After reaching their peak, Samsung’s share fell by 1.5% the next day. Following the resignation of one of its top leaders, Samsung will face a period of uncertainty in its management. Not only has Mr. Kwon resigned his position at the company, a number of other important personnel have also left the company under the bribery scandal which puts the company’s management stance under more pressure.
By March 2018, Mr. Kwon is expected to turn down his role of board director and chairman of the board. However, nothing can be said about his other two roles at the company. Moreover, successors to his role at the company have not been revealed.
Following Mr. Kwon’s resignation, Chung Sun-sup, chief executive of research firm Chaebul.com, said:
“I‘m worried about a leadership vacuum at a time when Lee is absent from management. However, the leadership changes also could be an opportunity for a new generation to emerge”.