According to Business Insider, Samsung Electronics Co. announced on Friday its CEO and Vice Chairman, Kwon Oh-hyun, would step down from the position after the concerns of the bribery scandal and corruption charges that led to former head of Samsung, Lee Jae-Yong, to a five year prison sentence, causing shares to fall 1.4 percent.
Kwon took the reigns of the leadership position within the company following Lee’s arrest, but now he has left the public with a surprise as he steps down from the management position. Kwon is also the chairman of the board and leads the component unit of the business that manufactures memory and display chips.
"As we are 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." Kwon wrote in a letter to employees.
“But now the company needs a new leader more than ever and it is time for me to move to the next chapter of my life." added Kwon.
The announcement happened on the same day the South Korean based electronics company forecasted for recording breaking earnings in the third quarter. The company said the high demands for memory and display chips drove the earnings for the quarter.
"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 CEO Score.
Park also said that although Samsung forecasts recording breaking earnings approaching, it presents risks to the management positions.
“Nobody wants to be the chief of Samsung Electronics at a time like this; it’s too risky,” said Park.
For the third quarter, Samsung is expected to report operating profits up to 14.3 trillion won or $12.51 billion, according to Thomson Reuters analysts. The company is also expected to generate 62 trillion won or $54.7 billion in revenue.
Samsung posted an operating profit of 5.2 trillion won or $4.5 billion in the third quarter of fiscal year 2016. This would potentially represent a 178 percent increase year over year, even with the Note 7 recall offsetting much of the earnings.