Pantech founder, vice chairman submits resignation over the worsening performance of the company while competing with major players like Samsung Electronics and Apple in the smartphone market

September 25, 2013 Leave a comment

Pantech founder, vice chairman submits resignation

Sept 25,2013

Park Byeong-yeop, vice chairman of Korea’s mobile phone manufacturer Pantech, turned in his resignation yesterday. It is believed Park has been under immense pressure over the worsening performance of the company while competing with major players like Samsung Electronics and Apple in the smartphone market. Pantech, which had enjoyed surpluses every quarter since 2007, recorded its first loss in the third quarter of 2012.Since then, it has posted an operating loss every quarter.In the second quarter, the company’s operating loss amounted to 49.5 billion won ($46 million). This is even larger than the 17.9 billion won loss recorded in the third quarter of 2012.
At the same time, sales have been dropping.
Park is known as one of the early members of the high-tech generation who founded Pantech at the age of 29 in 1991. He began his career in sales for Maxon Electronics in 1987. He started his own company that developed wireless devices with only six employees at a small office in Seoul.
Pantech rose to become one of the leading mobile phone companies when it expanded its business to CDMA mobile phones in 1997.
In 2000, he was promoted from CEO to vice chairman. Although Pantech is his company, he said he preferred the position as vice chairman and that he would only accept the chairman title when his work experience exceeded more than 30 years and the company’s annual revenue reached 10 trillion won.
The company grew further by taking over Hyundai Curitel in 2001 and SK Teletech in 2005.
However, Pantech’s struggles started from then on. The company saw declining sales in 2006 and finally applied for a workout in April 2007.
Under a tight restructuring and strong leadership, the company was able to overcome its difficulties.
But then it was faced with another challenge: The age of the smartphone dawned.
Pantech jumped into the smartphone business in 2011.
But near the end of 2011, Park announced his resignation, which drew much attention as Pantech at the time was on the verge of graduating from its workout program.
It was a move by Park to secure his position in management, but also pressure creditors on an early workout. He was able to force the creditors to switch debt to stocks and loans.

Filed under Macro Trends, TMT Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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