Samsung CEO Kwon Surprisingly Steps Down

Samsung Electronics Co Ltd. has announced that CEO and Vice Chairman Kwon Oh-hyun will step down from management, following the group’s scion, Jay Y. Lee’s imprisonment due to bribery.

Kwon will not seek re-election onto the Samsung’s board once his current term ends in March, 2018, the company said. He will also resign as CEO of Samsung Display, a position he held since 2016, according to the company.

The announced led to deepening concerns over a leadership vacuum at the tech giant, as Kwon cited an “unprecedented crisis” at the world’s most profitable technology company.

That followed an early morning guidance from the South Korean tech giant that it was expecting record operating profits of about 14.5 trillion Korean won ($12.8 billion) for the quarter ending in September.

“As we are confronted with [an] unprecedented crisis inside [and] out, I believe the time has now come for the company start anew, with a new spirit and young leadership,” said Kwon.

Following the imprisonment of Jay Y. Lee on charges of bribery and embezzlement, Kwon had been the company’s de-facto chief. In August, a South Korean court sentenced Lee to a five-year jail term. The heir to Samsung Group is currently appealing the decision.

Kwon, 64, is seen as Samsung Group No. 2. As well as being chairman of the board and a board director, he heads the components business – including memory chips – and the display business.

“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,” he added.

The world’s biggest maker of memory chips, smartphones and TVs is set to smash its annual profit record this year, thanks partly to soaring demand for memory chips. Semiconductors were Samsung’s top earner in the three months through June, making a record 8 trillion won ($7.20 billion).

Samsung’s share fell 0.6 percent on Friday after hitting an all-time high earlier in the day.

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