Samsung Electronics CEO Resigns, Citing Unprecedented Crisis In The Coy

The chief executive of Samsung Electronics Kwon Oh-Hyun, resigned on Friday, saying the South Korean tech giant was facing an “unprecedented crisis”, even as it flagged record third-quarter profits.

His resignation comes as the company struggles to overcome a bribery scandal that sent Lee Jae-Yong, its de-facto head and heir to the Samsung empire, to jail.

“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”, Kwon said.

“Fortunately, the company is now producing best-ever results but this is merely a fruit of decisions and investment made in the past”, he said in a statement.

South Korea’s largest company has been seeking to move past a bribery scandal that saw Lee thrown into jail, and to overcome a damaging recall last year of its flagship Galaxy Note 7 smartphone over exploding batteries.

Lee, who was found guilty in August of bribery, perjury and other charges relating to payments made by Samsung to the secret confidante of ousted president Park Geun-Hye, is appealing his five-year sentence and says he is innocent.

Kwon’s sudden departure may be a calculated legal tactic to seek a softer punishment for Lee, said Shim Jung-Taik, an author of several books on Samsung and its corporate culture.

“Lee’s lawyers may argue that Samsung, with the veteran Kwon gone, needs its vice chairman back more than ever to lead the firm,” he said, adding that the tactic had often been used by other family-run South Korean business empires.

One analyst who declined to be named said the departure of the 64-year-old Samsung veteran may signal a broader reshuffle at the top.

“Samsung’s CEO-level leadership has remained largely unchanged for past three years, which is like an eternity in the fast-changing tech industry,” said the analyst.

The group has not made any radical changes in its leadership since 2014 when the current chairman Lee Kun-Hee suffered a heart attack that left him bedridden.