11/01/2017 BBC Business Live


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11/01/2017

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This is Business Live from BBC News with Sally Bundock

:00:00.:00:07.

Donald Trump gets ready to tell us how he intends

:00:08.:00:15.

to separate his business interests from affairs of state,

:00:16.:00:18.

but can he really avoid conflicts of interest?

:00:19.:00:21.

Live from London, that's our top story on Wednesday, 11th January.

:00:22.:00:38.

The billionaire has business interests around globe.

:00:39.:00:39.

He'll try to reassure the world that they won't

:00:40.:00:42.

We will talk you through what's at stake.

:00:43.:00:52.

Also in the programme, the heir to the Samsung empire

:00:53.:00:54.

faces questioning over South Korea's

:00:55.:00:56.

We'll be live in Seoul for the latest.

:00:57.:01:03.

Markets in Europe look like this. All down just a touch, but let's not

:01:04.:01:08.

forget, they have been going up and up for days it would seem. We will

:01:09.:01:11.

talk you through the winners and the losers.

:01:12.:01:13.

We'll meet the man who bought a failing factory and turned

:01:14.:01:16.

into a thriving business feeding babies around the world.

:01:17.:01:21.

Plus a new device has been launched to muzzle noisy phone

:01:22.:01:23.

It is called a Hushmie and it can't be used by presenters I'm told!

:01:24.:01:49.

In the last few hours we've heard President Obama's farewell speech

:01:50.:01:52.

with just over a week left in charge of the world's biggest economy.

:01:53.:01:59.

Today his successor Donald Trump will give a long

:02:00.:02:01.

awaited press conference, his first since winning

:02:02.:02:03.

There are still questions about how he will separate himself

:02:04.:02:07.

In his latest disclosure the president-elect revealed

:02:08.:02:12.

These have had dealings in least 25 countries in Asia, Europe, Africa,

:02:13.:02:19.

Democratic Party politicians are amongst those to express

:02:20.:02:26.

concerns this could influence his policies towards some

:02:27.:02:28.

He derives much of his income from developing real estate

:02:29.:02:38.

and also operating golf courses in the US, Britain, Ireland

:02:39.:02:41.

But he also makes money from licensing the Trump name to property

:02:42.:02:49.

Some of those projects have been engulfed in controversy.

:02:50.:02:52.

However, it should be noted that as president he is legally allowed

:02:53.:02:55.

But previous presidents have put their businesses into blind

:02:56.:03:00.

trusts to prevent conflict of interests or the

:03:01.:03:02.

With me is Stephanie Hare, independent political risk analyst.

:03:03.:03:15.

This is all about trust. It has been such a divisive election campaign.

:03:16.:03:22.

What he says and what he does now is going to be crucial, isn't it, in

:03:23.:03:26.

regaining the trust of half the US population? Exactly. This is a

:03:27.:03:30.

question about perception. So, as we just heard, he is legally allowed to

:03:31.:03:35.

run those businesses. However, he is already looking likely to run foul

:03:36.:03:39.

of a clause which is part of the US Constitution. Something like his

:03:40.:03:45.

Trump International Hotel in Washington DC, he's going to be in

:03:46.:03:49.

violation of the lease terms on that which says he can't as an elected

:03:50.:03:52.

official hold the lease on that hotel. If he doesn't divest himself

:03:53.:03:58.

of his assets by 20th January, which looks highly unlikely unless we get

:03:59.:04:02.

a surprise announcement today, he will be in a position where it could

:04:03.:04:08.

look as though he might be able to manipulated or influenced or could

:04:09.:04:12.

himself seek to manipulate or influence based on his global

:04:13.:04:17.

holdings. And if he puts members of his family in key positions, that's

:04:18.:04:21.

going to have a big implication as well, isn't it? They too will have

:04:22.:04:24.

to show that they have divested to show that they have divested

:04:25.:04:30.

their interests? The purpose of a blind trust is that he would sell

:04:31.:04:35.

his assets and hand over the money to an independent administrator who

:04:36.:04:38.

runs that fund for the time that he is president. He would have no idea

:04:39.:04:42.

what's in the fund. That's not what we're seeing. We're seeing that he

:04:43.:04:46.

is proposing his two adult sons run the Trump organisation. Now, he

:04:47.:04:51.

knows what's still in his investment portfolio. Everyone knows what's in

:04:52.:04:55.

his investment portfolio in terms of what is public and he is going to be

:04:56.:04:58.

having a relationship with his two sons. The potential for conflict of

:04:59.:05:03.

interest there is very high. We have got Rex Tillerson who said he's

:05:04.:05:09.

going to sell off his share options and interests in Exxon mobile. He

:05:10.:05:13.

was CEO. Is that enough in regaining trust? That's easier. It is easier

:05:14.:05:18.

to sell shares than it is real estate. Everybody knows that there

:05:19.:05:22.

is the properties. They know who is the owner. There is few people who

:05:23.:05:26.

can afford to buy the properties whereas shares are easier. Rex

:05:27.:05:32.

Tillerson's divestment process is more straightforward than the

:05:33.:05:34.

president-elect faces. Stephanie, thank you.

:05:35.:05:40.

When the conference starts, we will be across it here on the BBC.

:05:41.:05:43.

Volkswagen's management and supervisory board are expected

:05:44.:05:46.

to meet later on Wednesday to sign off an agreement with the US

:05:47.:05:49.

A draft settlement has been reached for a $4.3 billion fine

:05:50.:05:53.

which would draw a line under the emissions cheating scandal.

:05:54.:05:56.

The German car-maker also said it would plead guilty

:05:57.:05:58.

The company has admitted cheating test on its vehicles

:05:59.:06:06.

and already agreed $15 billion in other settlements.

:06:07.:06:08.

Prosecutors in the United States have charged three UK based former

:06:09.:06:11.

currency traders with trying to rig foreign exchange rates.

:06:12.:06:14.

They worked at JP Morgan, Citigroup and Barclays.

:06:15.:06:19.

In 2015 the three banks as well as RBS paid $2.5 billion

:06:20.:06:21.

in fines after pleading guilty to conspiring to rig

:06:22.:06:24.

Lawyers for each of the three have denied they did anything wrong.

:06:25.:06:30.

The UK authorities decided not to bring any charges after looking

:06:31.:06:33.

The Turkish lira has hit new lows against the US dollar.

:06:34.:06:41.

During Asia's morning trade it fell another 0.5% to reach

:06:42.:06:48.

It's one of the worst performing currencies in the world

:06:49.:06:51.

The economy has suffered because of continuing conflicts

:06:52.:06:54.

with Kurdish militants and so-called Islamic State.

:06:55.:06:56.

On Tuesday Turkey's central bank took action to try

:06:57.:06:58.

Some breaking news on our BBC Live page. There is a story about food.

:06:59.:07:20.

The UK company Whitbread apologised over its beef lasagne. Apparently

:07:21.:07:24.

there were reports that its beef lasagne included pork which some

:07:25.:07:28.

people don't eat for religious reasons. Whitbread said some menus

:07:29.:07:34.

had not been properly updated. It issued an apology for that. It is a

:07:35.:07:41.

big player in the UK. It has many outlet including brewers fair and

:07:42.:07:45.

Costa Coffee chain. It is quite an interesting story.

:07:46.:07:49.

Prosecutors in South Korea have said in the last couple of hours that

:07:50.:07:52.

Lee Jae-Yong who is the de facto head of the Samsung is now

:07:53.:07:55.

a criminal suspect in the corruption inquiry that has already led

:07:56.:07:58.

to the impeachment of the country's president.

:07:59.:07:59.

Steve is in the South Korean capital. Steve, tell us more, this

:08:00.:08:13.

is pretty major in terms of the developments on this story. The

:08:14.:08:17.

allegation is that Samsung paid $18 million to a fund in Germany

:08:18.:08:22.

controlled by the best friend of the president of this country. And the

:08:23.:08:28.

allegation is being investigated that in return Samsung got the votes

:08:29.:08:33.

of the national pension fund for a big restructuring of the company. In

:08:34.:08:41.

2015, the ruling family wanted to merge two bits of Samsung. Outside

:08:42.:08:46.

shareholders said that's only so you can strengthen your hold on the

:08:47.:08:50.

company. It is not in the interests of the shareholders. But so the

:08:51.:08:55.

allegation goes. The national pension fund put its votes behind

:08:56.:09:00.

the family. The prosecutor now thinks that that maybe because it

:09:01.:09:06.

had given money to the friend of the president in the first place so.

:09:07.:09:15.

That's the allegation. The herir to the company and his father has been

:09:16.:09:24.

told to appear at the prosecutors office at 9.30am on Thursday

:09:25.:09:27.

morning. So it is a very serious turn of events and potentially very

:09:28.:09:33.

damaging for the company. All right, at the end of what's been a very

:09:34.:09:37.

damaging time for them. We'll talk to Steve on Thursday, I'm sure, as

:09:38.:09:42.

that unfolds. In Asia they had a good day. Japan

:09:43.:09:49.

and Hong Kong up. Let's look and see how Europe is faring. We've got VW

:09:50.:09:56.

shares up in Frankfurt. It is a big day for Volkswagen. In

:09:57.:10:02.

dominating. Lots of news coming from dominating. Lots of news coming from

:10:03.:10:06.

the big retailers in the UK about how they fared over Christmas.

:10:07.:10:12.

Sainsbury's shares up 3% and Morrisons shares up 4%. We'll talk

:10:13.:10:17.

about that in detail in a moment. That's a dominating story this week

:10:18.:10:19.

for the UK retail. Lots happening in the US. We've mentioned Donald

:10:20.:10:26.

Trump's press conference. Let's hear some more from Michelle on what Wall

:10:27.:10:32.

Street is watching. As well as Donald Trump's press conference

:10:33.:10:35.

where he is expected to discuss the future of his businesses, the coppic

:10:36.:10:42.

of conflict of interests is likely to pop up. Rex Tillerson. Rex

:10:43.:10:49.

Tillerson released a 38 page financial disclosure filing.

:10:50.:10:52.

Senators will want to probe his stance on Russia as well as his

:10:53.:10:56.

relationship with Exxon mobile the oil giant where he served as Chief

:10:57.:11:00.

Executive until this year. Just to give you an example. If the Trump

:11:01.:11:07.

administration lifts Russian sanctions Exxon mobile would be able

:11:08.:11:11.

to move forward with deals worth billions. Lawmakers will want to

:11:12.:11:16.

make sure Rex Tillerson is working in the interests of the US people

:11:17.:11:20.

and not for his former people. Former company.

:11:21.:11:28.

Joining us is Richard Fletcher, Business Editor of The Times.

:11:29.:11:32.

What impact has there been on the dollar? We have seen the dollar

:11:33.:11:38.

strengthen in the last few weeks and months, overnight, we saw it full

:11:39.:11:43.

back against a basket of currencies, but not against the pound. The

:11:44.:11:47.

market will have one eye on trump today. The expectation for the US

:11:48.:11:51.

economy, the market appears to have concluded many of his policies will

:11:52.:11:56.

be good. It is a boost but, there is the fear about protectionism and

:11:57.:11:59.

what it means for trade and what it means for the US relationship with

:12:00.:12:03.

China. It is quite interesting the World Bank global outlook was out

:12:04.:12:06.

today and that outlines the real uncertainty about the US and what

:12:07.:12:09.

impact it will have on the global economy, but interesting what

:12:10.:12:12.

Michelle said, I think, for the first time, more than ever, not for

:12:13.:12:15.

the first time, but more than ever, we have got this issue of business

:12:16.:12:19.

interest and being in that senior position and it is not just as

:12:20.:12:22.

Michelle said, Donald Trump, it is Rex Tillerson as well, head of Exxon

:12:23.:12:29.

mobile. Although we have had lots of announcements on Twitter, we haven't

:12:30.:12:33.

had many public announcements, we haven't had a big conference. It

:12:34.:12:40.

will be fascinating for the markets. Algorisms are really having to adapt

:12:41.:12:46.

to the tweets, aren't they, that policy seems to be indicated by

:12:47.:12:50.

Donald Trump's tweets and they are having to adopt to that, like we

:12:51.:12:55.

have with news wires in the past? There is a pause between the first

:12:56.:12:59.

tweet or the second tweet. He is either slow at typing or keeping us

:13:00.:13:05.

in suspense. UK retail, a big week? We had Next last week which was

:13:06.:13:08.

disappointing and Morrisons yesterday which was good.

:13:09.:13:14.

Sainsbury's today which was good and tomorrow we get Marks Spencer's

:13:15.:13:19.

and Debenhams and Tesco. At the end of tomorrow we conclude whether in

:13:20.:13:23.

the UK it was a good Christmas or bad Christmas for retailers. Reports

:13:24.:13:32.

that Wall Mart in the US is trying to restrict ture.

:13:33.:13:36.

-- restrict ture. Richard will be back in about five

:13:37.:13:43.

minutes. He's not done yet. We have got some good stories to discuss

:13:44.:13:51.

including the Hushmie! We've got a story that comes out of

:13:52.:13:58.

a movie. Our next guest is feeding babies

:13:59.:14:00.

around the world. The supermarket Sainsbury's said it

:14:01.:14:07.

had a record Christmas week as it The company said it saw

:14:08.:14:10.

30 million transactions Theo Leggett is in our

:14:11.:14:16.

business newsroom. So a good Christmas then,

:14:17.:14:23.

but was it all good news? Well, if you look at the market

:14:24.:14:30.

reaction, investors are certainly impressed. I like having a

:14:31.:14:34.

spectacular graph. Look at this one. Sainsbury's shares up nearly 8.5% so

:14:35.:14:38.

far this morning because analysts were expecting the figures to be

:14:39.:14:42.

worse. On the surface, as you said, they're good. ?1 billion worth of

:14:43.:14:47.

sales, 30 million transactions. Dig into the figures a little bit more

:14:48.:14:51.

and it is not quite so rosy. If you look at like for like sales, so

:14:52.:14:55.

sales that are comparable to the same period last year, they were up

:14:56.:15:01.

just 0.1% and overall sales, only up 0.8%. Not a spectacular performance,

:15:02.:15:06.

but think about it, this is a sector which is involved in a price war and

:15:07.:15:10.

there are all sorts of uncertainties and pressures like the fall in value

:15:11.:15:13.

of the pound which is likely to push up prices. So it will have come as a

:15:14.:15:18.

relief to Sainsbury's and other retailers that the Christmas period

:15:19.:15:23.

seems to have been pretty good. The British Retail Consortium were

:15:24.:15:26.

telling us yesterday that the last week before Christmas, with

:15:27.:15:29.

Christmas falling on a Sunday, so Christmas Eve being a Saturday was

:15:30.:15:33.

better than expectedment so overall, there is optimism even though if you

:15:34.:15:37.

look into the figures, they're not actually that spectacular. No what

:15:38.:15:48.

about the year ahead? The big thing hanging over Sainsbury's like other

:15:49.:15:53.

companies is the decline in the fall of the pound. Pushing up the price

:15:54.:16:02.

of imported products. Buying in pounds becomes weaker. Sainsbury say

:16:03.:16:07.

they are prepared. They say the market remains competitive. The

:16:08.:16:11.

impact of the devaluation of sterling remains uncertain, but they

:16:12.:16:17.

are prepared. Can you think of anyone who might need a Hush Me? No

:16:18.:16:26.

idea what you're talking about. MIT world? -- am I too old? Is a lot

:16:27.:16:38.

more on the website about Sainsbury's, Morrisons, how we are

:16:39.:16:39.

faring in the UK. You're watching Business Live -

:16:40.:16:43.

a reminder of our top story: Donald Trump is getting ready

:16:44.:16:45.

to unveil what steps he intends to take to make sure his business

:16:46.:16:48.

interests don't conflict Let's take a look at the markets.

:16:49.:17:01.

Slight drop across the board. In Europe anyway. Follows on from a

:17:02.:17:06.

record winning streak, particularly for the FT-SE 100. Nine straight

:17:07.:17:11.

sessions in a row where there was again. Well above that 7000 mark.

:17:12.:17:25.

Volkswagen shares in Germany, repercussions that they are settling

:17:26.:17:28.

$4.3 billion with US authorities. When our next guest came

:17:29.:17:31.

across a factory in northern England making baby formula-

:17:32.:17:33.

it didn't seem like Business was slow -

:17:34.:17:35.

so slow, in fact, that its owners But he was able to see the potential

:17:36.:17:39.

and managed to secure Next followed a deal with China -

:17:40.:17:44.

which was just recovering from a scandal over

:17:45.:17:54.

contaminated infant formula. China now makes up one third

:17:55.:17:57.

of the company's business. The raw materials are

:17:58.:18:04.

all sourced locally - using 220 farms in the region

:18:05.:18:08.

to provide the milk. And the business is expanding -

:18:09.:18:10.

it's now branching into And Ross McMahon, the boss

:18:11.:18:14.

of Kendal Nutricare joins me now. How did you manage to get into

:18:15.:18:30.

China? The holy Grail. What did you do? How is the approach different to

:18:31.:18:37.

getting into the UK supermarkets? I researched the market for five

:18:38.:18:41.

years, a lot of the research done before I bought the facility. I work

:18:42.:18:48.

with the state-owned company, Orient International. I met Mr Chang, a

:18:49.:18:53.

great man, working closely with him over the years. Waiting patiently to

:18:54.:18:59.

buy the facility. Launching the product in August, in 4000 stores,

:19:00.:19:06.

by February in 6000 stores, 90% of China. When you were in discussion

:19:07.:19:13.

with the Chinese business people, China was coming out of a terrible

:19:14.:19:19.

baby milk scandal. Chinese made baby powder was causing babies to be

:19:20.:19:22.

extremely unwell, some actually died. That had an enormous impact on

:19:23.:19:28.

the thinking of every mother in China. Tremendous loss of confidence

:19:29.:19:35.

in Chinese domestic product. Really looking all over the world. Britain

:19:36.:19:40.

has the best quality milk on its doorstep. I would imagine other

:19:41.:19:46.

countries would counter that! Australia importing a lot of

:19:47.:19:54.

product. We saw the opportunity to put natural raw materials back into

:19:55.:19:59.

the product. Multinationals were putting in oils, using skimmed milk.

:20:00.:20:04.

It is much more natural to use the full cream of the whole milk. A

:20:05.:20:09.

natural milk fat. This was a real gamble. The factory you bought was

:20:10.:20:15.

failing. What did you see when you went to visit that factory? What

:20:16.:20:21.

were your thoughts about turning it around? Festival, a world-class

:20:22.:20:25.

facility, built by Glaxo 55 years ago, the staff have tremendous

:20:26.:20:30.

knowledge. Absolute privilege to lead them. They have such a bank of

:20:31.:20:37.

knowledge. We share a vision, everybody excited about going all

:20:38.:20:40.

over the world. Representing the brand name of the town. All of the

:20:41.:20:43.

products we launch, now Kendal Adult. The whole town is

:20:44.:21:07.

behind us. Now there is more demand for baby milk products. The way the

:21:08.:21:14.

family is working, now grandparents are looking after babies. In the UK,

:21:15.:21:17.

you have not had that much success. The market is dominated by

:21:18.:21:28.

multinationals. They dominate the market. We are the only one using

:21:29.:21:36.

milk fat. We are getting fantastic feedback from consumers,

:21:37.:21:38.

testimonials from families across the UK. Better provenance, better

:21:39.:21:43.

sleeping patterns. People are embracing the quality of the

:21:44.:21:48.

product. The quality of the products, competitively priced.

:21:49.:21:53.

Supermarkets are ringing us up. In meetings and discussions with them,

:21:54.:21:56.

hopefully it will be available in the UK market by the summer. Good

:21:57.:22:05.

luck. Thank you for coming in. In MA meant we will get the stories in the

:22:06.:22:11.

business pages. Including the Hush Me, we will explain what it is. Many

:22:12.:22:15.

people getting in touch with that story. First, here is how to get in

:22:16.:22:20.

touch with us. You can stay ahead with all the day's breaking news on

:22:21.:22:30.

the Business Live page. We want to hear from you, too. Get involved.

:22:31.:22:46.

On TV, and online, whenever you need to know. We will explain what the

:22:47.:22:58.

Hush Me is now. Well we're looking at the papers. Phone gadget shuts up

:22:59.:23:07.

the office loudmouth. Sounds like a gift. It does rank as one of the

:23:08.:23:17.

strangest devices to come out of the CES conference in Las Vegas. Great

:23:18.:23:22.

amusement when we were discussing it at the Times. You strap it across

:23:23.:23:27.

your mouth, and it stops colleagues being annoyed by loud conversations.

:23:28.:23:33.

They think you should have won at the Times. You strap it on, you can

:23:34.:23:39.

have a conversation on the phone, very loud, no one will hear you. You

:23:40.:23:42.

get Bluetooth through your earphones. You can still hear what

:23:43.:23:48.

the other person is saying. It plays music over your conversation, even

:23:49.:23:52.

if colleagues are very close, they will hear coming music. Sounds

:23:53.:24:01.

fantastic. Joe says can they hand this out on trains? I'm not sure I'd

:24:02.:24:10.

want to use somebody else's. Simon says, really I get frustrated when

:24:11.:24:14.

the office resembles a library. I need an atmosphere. I do get that.

:24:15.:24:21.

Max, it has to be snoring. Where it at night. Would there be breathing

:24:22.:24:35.

issues? A whole list of things, so noisy keyboards, people cooking

:24:36.:24:38.

fish. People talking with their mouths full of food. I have to say

:24:39.:24:43.

somebody could kippers down here, I could not function that day.

:24:44.:24:48.

Financial Times, Deutsche Bank scowling social media to find

:24:49.:24:51.

talent. We know about the fact that when you apply for a job they will

:24:52.:24:55.

look you up, find out what you have been saying on Facebook, social

:24:56.:24:59.

media. The bank actually looking for people on social media, approaching

:25:00.:25:04.

them. Deutsche Bank are worried people are not applying to the bank

:25:05.:25:07.

that they would like to employ because banking has not got the

:25:08.:25:11.

reputation it once had. And they have had bad headlines. As well as

:25:12.:25:16.

encouraging people to apply they are searching out for graduates are

:25:17.:25:21.

searching social media profiles, Twitter, what clubs they are a

:25:22.:25:27.

member of. This is a bit like you're uncool bank turning up at the

:25:28.:25:30.

graduate party waving a brochure, feel slightly creepy. It is a

:25:31.:25:37.

reminder to all of us, what is on social media may come back to bite

:25:38.:25:48.

us. It is a gift for LinkedIn. If you were on Twitter, not quite as

:25:49.:25:51.

happy about your bank seeing your feed. Thanks for coming in.

:25:52.:25:54.

There will be more business news throughout the day on the BBC Live

:25:55.:25:59.

web page and on World Business Report.

:26:00.:26:01.

We will keep you updated on that press comments from Donald Trump.

:26:02.:26:07.