LG Electronics CEO Nam Yong resigns, new chief is named after record loss in handset businessBy Sangwon Yoon, AP
Friday, September 17, 2010
LG Electronics replaces CEO over profit slump
SEOUL, South Korea — South Korea’s LG Electronics, the world’s third-biggest maker of mobile phones, said its chief executive will be replaced by the brother of the LG Group’s chairman after record losses at its handset business.
Koo Bon-joon, the younger brother of LG Group chairman Koo Bon-moo, will replace Nam Yong, who offered to resign from the top job at a board of director’s meeting on Friday to take responsibility for poor management, LG Group said in a statement.
LG Electronics is the LG Group’s flagship business and its chief is considered no. 2 in rank after the group chairman. Nam, 62, who has held the CEO post for four years, will remain in the job until a March stockholders meeting, where Koo will be officially appointed.
“Nam Yong offered to resign as CEO to take responsibility for the flagging performance and pave the way for a new CEO to prepare for the coming year and beyond,” the statement said.
In July, the Seoul-based LG Electronics said second-quarter operating profit — seen as a direct indicator of business performance — plunged 90 percent to 126 billion won from a record high of 1.24 trillion won the year before. The handset business suffered an operating loss of 120 billion won compared with a profit of 620 billion won the year before.
Koo, 59, has served as executive officer in various subsidiaries of LG Group, most recently as vice chairman of LG International.