Samsung CEO announces resignation, despite surge in profits

One of Samsung’s (KRX:005930) three chief executives has announced resignation following an “unprecedented crisis”.

Kwon Oh-hyun had been thinking about his resignation for “quite some time”.

He said in a statement: “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 from the rapidly changing IT industry,”

A successor for Kwon Oh-hyun has not yet been decided.

Founding partner of technology consultancy firm QED, Ryan Lim, admitted that Samsung is “in a leadership crisis situation”.

“The current management structure seems to be a complicated web that does not clarify but rather confuses.

“This needs to be resolved soon as it can be worrying not to know who is truly steering the Samsung behemoth into the future,” he said.

Kwon Oh-hyun’s decision comes following a turbulent summer, where heir of the group was imprisoned with corruption charges.

Heir Lee Jae-yong was sentenced to five years in prison back in August after it emerged that he gave £29 million worth of donations to foundations run by a friend of South Korea’s former President Park Geun-hye, in return for political favours.

Prosecutors said the large donations were made in order to win government support for a  restructuring of Samsung. The defence team have argued the payments were signed off without Lee Jae-yong’s knowledge.

Samsung’s quarterly profits of £9.65 billion beat market expectations.

The firm was also given a boost by it’s newest Note 8 smartphone, which received the tech giant’s highest number of pre-orders ever.

“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 Kwon’s components business,” said the head of research firm CEO Score, Park Ju-gun.

Shares in Samsung hit an all-time high on Friday, before falling 0.6 percent.