Business

LG Electronics replaces chief executive

LG Electronics, the world's third-biggest mobile phone maker, has replaced its chief executive after record losses at its handset business.

Nam Yong will be replaced by Koo Bon-joon, the brother of the chairman of parent company LG Group.

Mr Nam offered to resign "to take responsibility for the flagging performance", LG Group said.

Nokia has also replaced its chief. Both firms have been under pressure in the competitive smartphone market.

Last week, Finland's Nokia announced that Microsoft business manager Stephen Elop would replace Olli-Pekka Kallasvuo as its chief executive.

Image caption Mr Koo will officially take the reins on 1 October

Days later, the head of Nokia's mobile business also resigned.

'Time to prepare'

South Korea's LG Electronics saw profits plunge 90% in the second quarter. Its handset business made an operating loss of 120bn won ($103m; £66m).

Mr Koo, who has served as an executive in various LG Group subsidiaries, will take over on 1 October.

Management changes are usually made at the end of the year, but LG said: "We made the decision to give an incoming chief executive enough time to prepare for next year."

Investors appeared to welcome the change, with LG Electronics shares closing 4.7% higher.

"Koo is expected to reshuffle the organisation and actively cope with the fast-changing IT industry," said Lee Yong-jik from AIG Investments in Seoul.

"LG is expected to narrow the gap with Apple and other leading smartphone makers."

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