South Korea’s LG Electronics Inc’s chief executive Nam Yong has resigned, due to the poor performance of its mobile phone business.
According to Reuters, Koo Bon-joon, a founding family member and the head of the trading firm for LG International will take over from Nam.
Nam resigned in order to take responsibility for poor management, LG reportedly said on Friday. He was made CEO and vice-president of LG in 2007.
LG has been under pressure due to a lack of competitive smartphone models to stand up against rivals such as Apple’s iPhone and the Samsung Galaxy S.
LG’s mobile division reported a record loss last quarter and expect a similar loss this quarter.
Investors welcomed this decision, pushing LG’s shares up nearly 6pc. The shares closed up 4.7pc, making it their biggest gain in six months.
"Koo is expected to reshuffle the organisation and actively cope with the fast-changing IT industry … LG is expected to narrow the gap with Apple and other leading smartphone markers," said Lee Yong-jik, a fund manager at AIG Investments in Seoul.
Koo is the younger brother of LG Group chairman Koo Bon-moo. He has spent most of his career at his family’s business group after working at US-based telecoms firm AT&T.
He owns LG Twins professional baseball team and was the head at LG Display.
"Koo has a deep understanding in technology and extensive experience in broad industries, from chemicals, electronics and resources," LG said.
These changes follow Nokia’s recent major reshuffling of management. CEO Olli-Pekka Kallasvuo was replaced by Microsoft executive Stephen Elop last week. This was followed by the resignation of Anssi Vanjoki, its mobile solutions lead.
With the increasingly competitive arena of smartphones, it will be interesting to see what these executive reshuffles will produce for the market.