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Samsung Electronics CEO Resigns, Company Facing ‘Unprecedented Crisis’

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Amid claims Samsung Electronics is facing an “unprecedented crisis,” CEO Kwon Oh-Hyun has announced he is stepping down from his role.

In a letter to employees, Kwon noted that as the firm is “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.”

He’s likely referring to the arrest of Lee Jae-Yong, the de facto head of Samsung Group; the 49-year old leader was imprisoned in August after he was found guilty of bribery and embezzlement.

The news follows Samsung Electronics’ prediction of record profits for its third quarter: it estimates that it’ll rake in $12.8 billion USD, which works out to a 179 percent increase from the same period a year ago, reads a report from Bloomberg.

A few hours before Kwon dropped the bombshell, Samsung Electronics said it expected profits for the last quarter to be at an all-time high, mostly thanks to the increase in memory chip prices. Sales of the Galaxy Note 8, which received more pre-orders than any other phone in the Note line, also helped boost the numbers.

Samsung has been seeking to move past a bribery scandal that saw the company’s de-facto head Lee Jae-Yong 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 ousted president Park Geun-Hye’s secret confidante Choi Soon-Sil, is appealing his five-year sentence and says he is innocent.

The future of Samsung Group’s biggest earner hangs in the balance. The company will have to work quickly to find successor; Kwon will only serve as a member of the board, as well as the CEO of Samsung Display, until March 2018.

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