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Samsung CEO resigns amid bribery scandal

Rob Horgan
Samsung CEO resigns amid bribery scandal

The bribery scandal that has rocked Samsung over the last year has taken an unexpected twist. Unable to continue in his role, CEO Kwon Oh-hyun has stood down from his role citing a 'crisis' within the tech giant.Oh-hyun’s resignation comes just a day after disgraced Samsung heir Jay Y Lee launched his appeal against a five-year jail term handed down to him in August following corruption charges. The timing of the decision will come as a surprise to other Samsung bosses, as Oh-hyun was expected to take on a bigger role at the company.

Kwon is seen as Samsung’s 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, Oh-hyun said the time had come to “start anew with new spirit 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.

While scandal, resignations and bribery allegations blight Samsung’s boardroom, the company’s profits continue to soar. The company is expected to smash its annual profits this year, largely due to soaring demand for its memory chips. After announcing record-breaking figures for the second quarter, the tech giant looks set to announce another bumper quarter for the period of July-September. Shares in the electronics company jumped by 4.5 per cent this morning as analysts predict the tech giant to announce record profits in its memory chips for the third quarter.

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Earlier this year, many analysts predicted that Samsung would take Intel’s memory chip crown before the end of the year. Many industry analysts predicted that Samsung would dethrown Intel as the number one chip manufacturer in the world. It came after the South Korean tech giant has reported record quarterly profits, thanks largely to a boom in demand for its memory chips, for the second quarter.

Reporting an operating profit of 14 trillion won (£9.3 billion) in the three months up to June, Samsung increased profit by 72 per cent year-on-year. Sales climbed 18 per cent to 60 trillion won, buoyed by strong sales of smartphones including the new flagship Galaxy S8.

The numbers prove that Samsung has overcome the disastrous embarrassment caused by the Galaxy Note 7 recall, after users complained of the device ‘exploding’ or catching on fire due to a battery fault. The company suffered a further PR nightmare when its chief Jay Y Lee was arrested over an ongoing political bribery scandal. However neither the Note 7, nor Lee’s upcoming trial appears to have affected the running of the company.

Benefitting from both a rise in demand and price for semiconductors and smartphone memory chips, many industry analysts now believe Samsung could outdo Intel in terms of sales in 2017. It would be the first time Intel was knocked off the top of the global semiconductor market-share rankings for the first time since 1991.

Tags: Samsung, Vendors, Kwon Oh-hyun, Jay Y. Lee

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