12/01/2017 Asia Business Report

Now on BBC News all the latest business news live from Singapore.

Samsung's group leader offers an apology before he takes the hot seat

as a suspect in South Korea corruption scandal. It is a $3

billion industry, as parents spend big time for high-tech smart toys -

sales are growing fast. Good morning, Asia. Hello, world. It is

Thursday. Lagutin during us for this edition of Asia Business Report. We

start with Samsung and the group leader Lee Jae-yong has arrived at

short time ago with the South Korean prosecutor office for questioning

over bribery suspicion is, it is part of a scandal that may

permanently unseat the president. Samsung is accused of giving

donations to non-profit foundations to a confidant of the President in

return for assistance in a business transaction. Mr Lee apologised.

TRANSLATION: I am very sorry to the South Korean people. Samsung has

denied any wrongdoing, so what do prosecutors hope to find? I put the

question to our Korea correspondent, Steve Evans. The prosecutors have

got hold of a second laptop, and tablet, rather, owned by the mentor

of the President, a crucial figure in this whole thing, and it is

alleged there are notes of a meeting between the President of this

country and Mr Lee, the chief of Samsung, in effect, the man running

Samsung, and the details of those meetings seem to indicate that

President Park expected money for her friend's funds in return for the

pension fund backing something, and internal change within Samsung, a

very important big deal within Samsung, so what the evidence,

prosecutor things he has got, is hard disc evidence of a meeting

where promises were exchanged. It should be said that Samsung

emphasises it is absolutely innocent of corruption. This is an

investigation that the prosecutor has said he is being interviewed as

a suspect, rather than a witness. All right, this whole new evidence

basically makes this investigation more complex. What could be the

repercussions for Lee Jae-yong and the Samsung group? We are not there

yet. We have some way to go. But clearly, if Samsung is criminally

indicted and found guilty of corruption, and the man at the top

of Samsung is found guilty of corruption, that reflects on the

Samsung brand, there is no doubt of that. But, having said that, there

are lots of chaebol heads in this country found guilty of corruption,

it is as blunt as that, and people say, well the product seems good, I

am going to keep buying it. The US justice department has

charged six volts wagon executives it says are responsible for the

scandal over cheating on emissions standards -- Volkswagon. The company

agreed to pay for $.3 billion in fines to settle the issue and that

is in addition to the $17.5 billion already agreed in settlements with

car owners, dealers and for the environmental cleanup. VW also

agreed to plead guilty to three criminal charges relating to the

scandal. Earlier, I spoke with an auto analyst. I think it is very

significant because it obviously indicates that it is not just

companies as a whole but individuals within companies that will be held

responsible for these kind of activities, I think that is where

the government wants to go with it. And what kind of impact do you think

will this have on the automotive industry? Well, you know, there are

a lot of companies that have faced tough scandals in the past, and I

think that there was always a fee to be paid at a fine and some public

image damage, but there were never any individuals held accountable. I

think every executive knows now that it is not their company only but

themselves and everyone underneath them that can be held accountable

when something like this happens. I think that is the example the

government wants to set this time around. All right, but does this

really set the stage for a big lesson for the auto industry with

this $4.3 billion fine for Volkswagon? Yes, this is a huge

pay-out, it is the biggest one, the biggest removal find that a company

has ever had to pay and I feel like it reflects not just, you know, a

problem with the company but one that is seen as kind of carefully

engineered as opposed to something like a mistake or a failure in a

part, but one that was actually designed and engineered in right

from the start. What about Volkswagon, will car sales be

impacted? The truth is, every other company has come back from larger

scandals that have been anything like this, they have always bounced

back. Especially if the product is good and you don't see any kind of

recurring theme going along these lines, the public doesn't have a

very long memory and they don't look back and by the product again. Auto

analyst Karl Brauer joining us earlier from Detroit.

Well, the US President-elect Donald Trump has held a fiery first press

conference where he announced he will hand over control of his

business empire to his two sons to avoid any conflict of interest as

president. Well, in recent days he has been hitting out at China and

Japanese carmaker ToyotaA, but he has also met with the founder of

Alibaba, Tony Maher -- Jack Ma, and earlier I asked an analyst if Asian

businesses should be concerned about his approach to trade. It's

interesting, I was looking at trade data between Singapore, Malaysia,

Indonesia and so on, and the US. Trade with those nations and the US

has been declining for about six years, OK. The only place in South

East Asia where trade has risen with the US is Vietnam. So, you know, it

couldn't possibly get any worse than it is right now. So, as you look at

the bilateral approach that Trump will take, and his administration

will take on the there are expectations that things will

improve, so the discussion about a Chinese trade war is fictitious, it

is not going to happen. Tony Nash from Complete

Intelligence. Each year, thousands of buyers flock

to the Hong Kong police air despite an uncertain economic environment.

The global toy industry is expected to expand 7% in 2017. This is

according to Euromonitor. There is one category that is growing much

faster than any of the categories in the toy market, and that is

high-tech smart toys. Our correspondent went to take a

look. Welcome to Asia's largest toy show,

it is full of sights, sounds and of course toys. Some not yet available

to the general public. Thousands of buyers, most of wholesalers, here on

the hunt for the next blockbuster. Globally, the industry was worth

almost $190 billion last year, and likely to expand by 7%. All eyes are

on smart toys, still a macro -- niche market, expected to triple in

four years. So, this is a great example of what a smart to is, it

looks like a traditional plain that for kids but it has got just a

little bit of something extra -- play mat for kids. Yes, exactly, so

with the device you can scan any animals on the mat and you can teach

children how to spell, L-I-O-N. Lion. And then it has this, so the

children understand animal sounds. We have been making regular play

mats for 13 years but it is tougher to make money, so now with the

technology advancing to where it is, we find that we can offer a higher

end Rodarte where children can learn from it. So, smart toys are normally

embedded with some kind of technology that responds to a

device. And increasingly it is not just traditional toymakers who are

entering the market. TRANSLATION: We started out making electronic cots

mainly for overseas manufacturers but the business isn't big and not

growing, so six years ago we found the educational toy industry has

good prospects, so that is why we decided to make innovative toys. It

is still a relatively small market, but high-tech toys are growing in

popularity. Soon it may be commonplace to sing your phone or

tablet with a digital toy -- sync your phone or tablet.

And, before we go, a look at the market. As you can see, a mixed bag

so far for the regional boards, the Nikkei 245 down 1.1% due to the

weaker dollar against the Japanese yen, and this is impacting the

export companies. As for the All Ordinaries index, with a rise in oil

prices of 2.5% overnight, well, that is pushing oil and commodity prices

higher, and stocks on the All Ordinaries index gaining about 19.2.

Thank you so much for