SEOUL: Samsung 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 (SR29.73 billion).
The global chip industry is undergoing a major shift with Japan’s Toshiba partnering with home rival SK Hynix, and other firms consolidating in search of new growth areas like artificial intelligence and automobiles.
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 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.
Samsung chief executive announces shock resignation as profits surge
Samsung chief executive announces shock resignation as profits surge
Closing Bell: Saudi benchmark index closes lower at 10,540
RIYADH: Saudi equities ended Wednesday’s session lower, with the Tadawul All Share Index falling 55.13 points, or 0.52 percent, to close at 10,540.72.
The sell-off was mirrored across other indices, with the MSCI Tadawul 30 Index retreating 5.79 points, or 0.41 percent, to close at 1,393.32, while the parallel market Nomu slipped 74.56 points, or 0.32 percent, to 23,193.21.
Market breadth remained firmly negative, as decliners outpaced advancers, with 207 stocks ending the session lower against just 51 gainers on the main market.
Trading activity moderated compared to recent sessions, with volumes reaching 123.5 million shares, while total traded value stood at SR2.72 billion ($725.2 million).
On the sectoral and stock level, Al Moammar Information Systems Co. led the gainers after surging 9.96 percent to close at SR172.30, extending its rally following a series of contract announcements tied to data center and IT infrastructure projects.
Al Masar Al Shamil Education Co. climbed 4.89 percent to SR27.48, while Naqi Water Co. advanced 3.36 percent to SR58.50. Al Yamamah Steel Industries Co. and Al-Jouf Agricultural Development Co. also posted solid gains, rising 3 percent and 2.86 percent, respectively.
Losses, however, were concentrated in industrial names. Saudi Kayan Petrochemical Co. fell 3.67 percent to SR4.73, while Makkah Construction and Development Co. slid 3.44 percent to SR80.
Saudi Tadawul Group Holding Co. retreated 3.28 percent to SR147.50, weighed down by broader market weakness, and Saudi Cable Co. declined 3.18 percent to SR143.
Alkhaleej Training and Education Co. rounded out the top losers, shedding just over 3 percent.
On the announcement front, BinDawood Holding announced the signing of a share purchase agreement to acquire 51 percent of Wonder Bakery LLC in the UAE for 96.9 million dirhams, marking a strategic expansion of its food manufacturing footprint beyond Saudi Arabia.
The acquisition, which remains subject to regulatory approvals, is expected to support the group’s regional growth ambitions and strengthen supply chain integration.
BinDawood shares closed at SR4.68, up 0.43 percent, reflecting a positive market reaction to the overseas expansion move.
Meanwhile, Al Moammar Information Systems disclosed the contract sign-off for the renewal of IT systems support licenses with the Saudi Central Bank, valued at SR114.4 million, inclusive of VAT.
The 36-month contract is expected to have a positive financial impact starting from fourth quarter of 2025, reinforcing MIS’s position as a key technology partner for critical government institutions. The stock surged to the session’s limit making it the top gainer.
In a separate disclosure, Maharah Human Resources confirmed the completion of the sale of its entire stake in Care Shield Holding Co. through its subsidiary, Growth Avenue Investments, for a total consideration of SR434.3 million.
The transaction involved the transfer of 41.36 percent of Care Shield’s share capital to Dallah Healthcare, with Maharah receiving the full cash proceeds.
Despite the strategic divestment, Maharah shares closed lower, ending the session at SR6.12, down 1.29 percent.
