Samsung CEO Kwon Oh-hyun Announces Shock Resignation as Profits Surge

Kwon Oh-hyun’s resignation deepens concerns of a leadership vacuum at the tech giant.

Samsung Electronics Co Ltd ssnlf said on Friday its CEO and Vice Chairman Kwon Oh-hyun plans to step down from management, deepening concerns over a leadership vacuum at the tech giant after group scion Jay Y. Lee was jailed for bribery.

The surprise resignation of Samsung’s chip and display head came as he was expected to take a bigger role following Lee’s arrest in February and the departures of other key executives in the wake of the bribery scandal.

The move came on the same day the South Korean smartphone maker forecast record third-quarter operating profit on the back of the memory chip business which Kwon was instrumental in building into the world leader.

“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 Park Ju-gun, head of research firm CEO Score.

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.

In a statement, the man known as “Mr Chip” said the time had come to “start anew with new sprit and young leadership”.

“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).

The global chip industry is undergoing a major shift with Japan’s Toshiba Corp partnering with home rival SK Hynix, and other firms consolidating in search of new growth areas like artificial intelligence and automobiles.

Shares in Samsung, worth about $ 350 billion, fell 0.6 percent on Friday after hitting an all-time high earlier in the day.

CHANGING THE OLD GUARD

The departure of 32-year Samsung veteran Kwon after five years in the top job comes at a time of leadership uncertainty at the company.

Choi Gee-sung, Jay Lee’s mentor, quit earlier this year for his alleged role in the bribery scandal, and Samsung Electronics now needs to fill several more key roles with Kwon’s exit.

Kwon would serve out his term as chairman of the board and board director until March 2018, the company said. He is also not stepping down immediately from his two other roles.

A Samsung Electronics spokeswoman declined comment on the exact timing of succession and potential successors for Kwon’s roles.

While Samsung Group is South Korea’s top conglomerate with businesses ranging from smartphones to hotels – it has had no ‘Plan B’ for taking big decisions following Lee’s arrest, people familiar with the matter have said.

“I‘m worried about a leadership vacuum at a time when Lee is absent from management,” Chung Sun-sup, chief executive of research firm Chaebul.com, said following Kwon’s announcement.

The leadership changes also could be an opportunity for a new generation to emerge, he added.

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Samsung scion's defense fights back as legal appeal begins

SEOUL (Reuters) – The heir to South Korea’s Samsung Group appeared in a packed court on Thursday for the first day of arguments in the appeal of his five-year jail term for corruption.

The 49-year-old Jay Y. Lee was convicted by a lower court in August of bribing former president Park Geun-hye to help strengthen his control of the crown jewel in the conglomerate, Samsung Electronics, one of the world’s biggest technology companies.

The appellate court hearing the appeal is likely to try to rule on the case by next February, legal experts said. Whichever side loses could take the case to the Supreme Court, the final court of appeal in South Korea.

Lee’s presence marked his first public appearance since the August ruling. He did not speak during the early proceedings other than giving his birth date and address.

The lower court in August had ruled that while Lee never asked for Park’s help directly, the fact that a 2015 merger of two Samsung affiliates did help cement Lee’s control over Samsung Electronics “implied” he was asking for the president’s help to strengthen his control of the firm.

The defense strongly challenged the lower court’s logic that Lee’s actions “implied” solicitation for help from Park by providing financial support for the former president’s close friend and confidante Choi Soon-sil.

The prosecution, which has lodged a cross-appeal against the lower court ruling that found Lee innocent on some charges, said the court’s decision to not acknowledge explicit solicitation for Park’s help from Samsung despite the evidence found “did not make sense”.

DEFENSE FIGHTS BACK

The defense, which spent much of its time during the initial trial refuting the prosecution’s individual charges, is expected to focus on a few key arguments in the appeal – including whether there was in fact an “ordinary type of bribery” as defined under South Korean law, which says only civil servants come under the statute.

Park’s friend Choi was not a civil servant.

The lower court found that Samsung’s financial support of 7.2 billion won ($ 6.27 million) to sponsor the equestrian career of Choi’s daughter constituted an ordinary type of bribery, as “it can be considered the same as she (Park) herself receiving it.”

The defense is expected to strongly challenge this by saying that the prosecution, on whom the burden of proof lies, has not proved collusion between Park and Choi.

Reporting by Joyce Lee; Additional reporting by Heekyong Yang; Editing by Neil Fullick

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Samsung to Acquire Joyent Cloud Based Company

This acquisition is meant to boost the prospects of the cloud based services on the Samsung mobile services to compete with the big competitors in the marketplace.

joyent acquiredGreatResponder.com  Electronic device giant Samsung Corporation announced this week that it is going to acquire Joyent, the cloud computing based service provider company. All financial, technical and commercial aspects have been finalized between the two companies, according to the announcement made by Samsung. Although, the financial terms and conditions for the acquisitions have not been disclosed in the official statement.

It was further informed in the statement that the major objective of this acquisition is to boost the cloud computing based services offered on the Samsung mobile devices, especially the mobile apps and other associated services to compete with the top competitors of the company in the marketplace.

Meanwhile, the official blog of the company states that the existing top member of Joyent will continue working with the Samsung corporation on its cloud project, which envisions the future of the company to progress. Joyent will not be merged into the organization, but it will operate as an standalone company for the cloud project.

“As a result of this acquisition, Samsung will become an anchor tenant for Joyent’s Triton and Manta solutions, and will help fuel the growth of our team and the expansion of our worldwide data center footprint. This acquisition, though, is about more than just adding financial muscle and scale. Joyent and Samsung share a culture of innovation and technical excellence, and bring together a set of highly complementary cloud, big data, mobile and IoT technologies,” CEO, Joyent Company, Scott Hammond wrote in his official blog.

Earlier this major acquisition of US based company, two major companies were also acquired by the Korean giant to strengthen its mobile payment portfolio. These companies include LoopPay and SmartThings, whicy were acquired during the last couple of years.

Many technical experts in the field believe that Joyent was positioning for acquisition for quite a few years, but could not succeed. The main reasons for the present acquisition for Samsung are the Triton, a container infrastructure platform and the Manta, which is cloud based object storage services offered to many reputed clients in the marketplace.

This acquisition will increase the prospects of the cloud based services on the Samsung devices.

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