LG Electronics chief axed after losses spiral

South Korea's LG Electronics, the world's third-biggest maker of mobile phones, is replacing its chief executive after record losses at its handset business.

Nam Yong will be replaced by Koo Bon-joon, the younger brother of LG Group chairman Koo Bon-moo, after offering to resign at a board meeting today.

LG Electronics is the LG Group's flagship business and its chief is considered to be number two to the group chairman. Nam, 62, who has held the 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," LG said.

In July, LG Electronics said second-quarter operating profit - seen as a direct indicator of business performance - plunged 90% 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.