­South Korea’s LG Electronics has replaced its CEO following record losses at the mobile phone handset division. Nam Yong will be replaced by Koo Bon-joon, the brother of the chairman of the parent company LG Group. The handover takes effect from the beginning of October.

LG Electronics had reported a profits plunge of 90% in the second quarter, when its handset business made an operating loss of 120bn won (US$103 million).

The 58-year-old Koo Bon-joon has served as the CEO of flat-screen maker LG.Philips LCD, later renamed as LG Display, and worked as a project manager at the USA based AT&T.

“Koo has a deep understanding in technology and extensive experience in broad industries from chemicals, electronics and resources,” LG said in a statement.

“He had also successfully transformed LG Display through difficult times and enhanced profitability of LG International dramatically.”

Mr Nam offered to resign “to take responsibility for the flagging performance”, LG Group said. LG Electronics shares jumped by nearly 5 percent on the news of the changeover at the top of the company.

The company traditionally waits until the end of the year before making significant management changes. “We made the decision to give an incoming chief executive enough time to prepare for next year,” LG Group said in a statement.