Samsung Electronics CEO Kwon announces shock resignation as profits surge

SEOUL (Reuters) – Samsung Electronics Co Ltd 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 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.

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.

FILE PHOTO: Kwon Oh-Hyun, co-chief executive officer of Samsung Electronics Co., speaks during the company’s annual general meeting at the Seocho office building in Seoul, South Korea, March 24, 2017. REUTERS/SeongJoon Cho/Pool/File Photo

Shares in Samsung, worth about $ 310 billion, fell 1.5 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.

Samsung logo as seen during Galaxy Note 8 consumer launch event in Jakarta, Indonesia September 29, 2017. REUTERS/Beawiharta

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.

Reporting by Joyce Lee and Hyunjoo Jin; Editing by Stephen Coates

Tech

FanDuel announces acquisition of leading esports platform AlphaDraft

PRESS RELEASE:

Strategic alliance marks FanDuel’s entry into the rapidly growing fantasy eSports market

NEW YORK–(BUSINESS WIRE)–September 24, 2015–

FanDuel Inc. (www.fanduel.com), the largest one-day fantasy sports operator, today announced it has acquired leading fantasy eSports platform, AlphaDraft. Marking its entry into the fantasy eSports market, FanDuel will leverage the partnership to enhance and expand core product offerings in order to further reach new sports fans while maximizing engagement.

With the best talent in the sports tech industry, FanDuel’s acquisition of AlphaDraft, the premier daily fantasy sports platform that seamlessly blends eSports, live streaming and fantasy sports contests, will bring the company’s employee base in-house to help create a one of its kind daily fantasy product specifically for eSports. This partnership marks the first time FanDuel will have a product for the eSports community.

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“With over 200 million people globally watching eSports, AlphaDraft gives those fans a way to engage with this burgeoning entertainment product that creates an enormous opportunity for us,” said Nigel Eccles, CEO and Co-founder, FanDuel. “This is sports for a new demographic, with very little crossover with what are considered traditional sports fans, and this acquisition gives us the ability to leverage the expertise of AlphaDraft’s team, while helping their efforts in customer acquisition and building awareness of this new industry. It’s a win-win.”

The acquisition of AlphaDraft continues FanDuel’s long-term strategy of acquiring top talent around the fantasy sports industry as it builds one of the finest fantasy products for players – all designed to enhance the sports experience. This comes on the heels of the acquisition of numberFire, the premier next generation sports analytics platform, and Kotikan, a leading mobile app developer.

“It is clear that FanDuel is committed to the fan community,” said Todd Peterson, CEO of AlphaDraft. “This pairing creates an incredible opportunity to drive the fantasy industry forward and create compelling products that will enhance all fan engagement.”

Investors in AlphaDraft to date include former NBA Commissioner David Stern, Melo7 Tech Partners, Metamorphic Ventures, WME, Upfront Ventures, IDG Ventures, Greycroft Partners, Freestyle Capital, KEC, Amplify.LA and others. eSports generated $ 612m in revenue last year and 13% of all live stream viewers are watching eSports. By 2017, the number of eSports fans is projected to come close to that of American football.

About FanDuel

FanDuel is the leading daily fantasy sports provider with the sole mission of making sports more exciting. Founded in 2009, FanDuel has redefined fantasy sports; offering a multitude of one-day game options for NFL, NBA, MLB, NHL, and college football and basketball, with new public and private leagues forming daily, ranging in size from two to thousands of players. FanDuel is the Official Partner of the NBA and has multiple deals with NFL and NBA teams, driving fan engagement, hosting numerous live events and creating once-in-a-lifetime experiences for sports fans throughout the year. Based in New York City with offices in Los Angeles, Orlando, Edinburgh and Glasgow, FanDuel has raised $ 363 million in funding from investors including KKR, Google Capital, Time Warner/Turner Sports, Shamrock Capital, NBC Sports Ventures, Comcast Ventures, Pentech Ventures, Piton Capital and Bullpen Capital.

About AlphaDraft

Founded in 2014, AlphaDraft is the premier online platform that seamlessly blends the highly popular worlds of eSports, live streaming and fantasy sports, with daily and weekly contests for cash and other real-world prizes. Members draft a new team every day without season-long commitments, and play against friends and other fans without having to create their own fantasy leagues. There is no purchase necessary to register, and AlphaDraft offers both free and paid contests. For more information, please visit www.AlphaDraft.com or follow us on Twitter at @AlphaDraft.

 

 

View source version on businesswire.com: http://www.businesswire.com/news/home/20150924006288/en/

FanDuel
Emily Bass, 646-930-0231
[email protected]
or
AlphaDraft
Mario Kroll, 919-414-2038
[email protected]



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