09/03/2017 BBC Business Live

This is Business Live from BBC News with Sally Bundock and Alice Baxter.

It's called the Trial of the Century in South Korea

and it kicked off today - Jae Y Lee pleads not guilty

to corruption charges including bribery and embezzlement.

Live from London, that's our top story on Thursday, 9th of March.

With a verdict expected in as little as three months' time, we'll ask

what the fate of the boss tells us about South Korea's biggest company.

Prices in China's factories rocket the most since

Could the world's factory be making inflation for the rest of us?

We will be keeping a close eye on the markets. Markets in Europe also

seeing opening slightly down. Is it child's play or an incredible

business idea? The former publisher who opened the door to magical toys.

And the former UK Chancellor, George Osborne, is to be paid almost

$800,000 a year for advising the US fund manager for just 48 days work.

the money. Do you think this is the money. Do you think this is

right? Get in touch. We start in the South

Korean capital, Seoul, where what's being called

the Trial of the Century has begun. The man in charge of the country's

biggest company, Samsung, has formally denied charges

of bribery and embezzlement in a scandal that has also seen

the president impeached. Samsung may be a household

name around the world, Jae Y Lee is vice-chairman

of the company, but he's known in the South Korean media

as the "crown prince of Samsung". That's because he's the only son

of the chairman, Lee Kun-Hee, who was once convicted of bribery

and tax evasion but later pardoned. Jae-Y has been in charge

since his father had That gives you a sense of the

background to the story. Geoffrey Cain is a journalist

who spent five years in Seoul and is now writing

a book about Samsung. He joins us from Arizona,

in the United States. We talk to you before when it was

unfolding. Today he is in court. If us a sense of how big a deal this is

for South Korea, Samson and for politics there. It is a very big

deal. This case is the trial of the century for South Korea. We have

never seen this happen before the eyes chairman is arrested before

being charged with a crime -- the vice-chairman. In the past, his

father has been convicted but he was never arrested and never actually

served any prison sentence. He was pardoned by a president. This is a

very unusual case. Will we see this case happening at the same time that

a sitting president is impeached, will we see the perfect storm

to a change in how business is done to a change in how business is done

in South Korea? I mean between it and politics? I do not think there

will be a fundamental change in the way politics and business are done

in South Korea. I think the general foundation will be in place, it is

something that has been in place for decades. The system goes back

through the history of South Korea's democracy, its authoritarian

governments in the past. However, we could see more transparency in

general. Broader changes that might push things in the right direction,

especially considering both of these cases are popping up at the same

time and the president herself, if she is found to be in this bad

situation, she may also face trial. In the meantime, for the company,

business as usual. The shares recently at record highs, profits

rolling in, products still selling despite the scandal and the Galaxy

7. That is the beauty of Samsung. It manages to get through all sorts of

hard times, smoking phones, problems with the leader, the WikiLeaks with

the CIA espionage against its smart TVs, one thing after another. It

seems that this company has such a strong system in place that can

weather all of it, they can keep making the products, the hard work

and that is the bottom line. Do we think Jae Y Lee might end up behind

bars or will he be pardoned like his dad? That depends on who becomes the

next president. It is hard to tell. I can definitely say many presidents

have taken office in South Korea and many have pledged to clean up the

system, stop the systems of presidential pardons, even the

current president who was undergoing her impeachment decision with the

constitutional court, she also pledged to clean up the system and

now she is the one in the dock for the giant scandal. I am doubtful

much will really change. We have lost you for a moment. He joined us

from Arizona. We spoke to him a couple of weeks ago. I was just

going to ask him what the time is there. He is great.

Interesting stuff. Lots of news about Samsung on our website as

well. Shares in Toshiba have closed down more than 7% in Tokyo. The

latest news comes after Reuters reported bankruptcy attorneys have

been hired. It has cost Toshiba $6.5 billion putting the company's future

at risk. Cab hire service Uber says it

will ban a secret software tool from being used

to evade undercover regulators. The software, called Greyball,

seeks to identify officials around the world trying to catch Uber

drivers operating illegally. The ride-hailing firm has been

using the tool to secure early access to cities

where its operations had not Reports from Vietnamese state media

suggest drinks giant Coca-Cola is planning to invest an additional

$285 million in the country. The beverage maker's decision

highlights its interest in the Vietnam market and may put

pressure on its competitors. With this investment, Coca-Cola's

total investment in the country Let us talk producer price inflation

in China. That's the prices of goods

as they leave the factory gate - it has been soaring at its fastest

rate in almost nine years. It's being fuelled by a jump

in the price of steel The official data has raised

the prospect that China may be about to export inflation

to the rest of the world, as the What more do you have for us on

this? As you mentioned, it was because of higher prices of steel

and other raw materials. If you take a look at the consumer price

inflation index, the prices of what consumers buy, it is cooled to the

slowest pace in over two years. Going in separate directions,

analysts are slightly puzzled about the strength of the broader economy.

Just over the weekend, Beijing has cut its growth target for this year

to 6.5%, the slowest growth, if confirmed, in nearly three decades.

Overall, it seems the higher production costs have not even

passed over to consumers just yet. Thank you. As we have just been

hearing, the big news out of China was that producer price inflation

accelerated to its fastest pace in nearly nine years, but consumer

inflation cooled more than expected. And that's had a huge downward

bearing on Asian markets. Energy firms also led a broad

sell-off on Thursday following a 5% plunge in oil prices, but the dollar

advance on the yen provided the region with one of its only

advances as Tokyo's Nikkei added 0.3% to end a four-day

losing streak. Meanwhile, here in Europe,ahead

of today's ECB meeting where the expectation

is that monetary policy markets here in London

markets particularly And Michelle Fleury has

the details about what's ahead They will be paying close attention

to the ECB meeting. Data on the number of Americans filing for

unemployment benefit is released this birthday. Most economists

looking for a rise of 4000 -- this Thursday. All of this comes ahead of

Friday's monthly jobs report, the last major piece of economic news

ahead of the US central bank policy meeting. Expectation is they will

raise rates. The tough retail environment is likely to have an

impact on results from office supplies company Staples. The

fourth-quarter results of June Thursday. Intense competition from

Walmart and Amazon most likely hurt sales -- results are coming on

Thursday. James, nice to see you. Loads of stories today. This we

should mention as well, change at the top at BT. A minor coming in.

Famously he was chairman of SAB Miller last year. A stalwart of the

city. BT will be very happy to have him as chairman. And Rio Tinto, he

has been on the board for a long time, he steps down later this year.

Change at the top, big change in career from mining to telecoms. Let

us talk about the UK budget, it came out yesterday, splashed across the

papers in the UK. The headline here has been the changes to national

insurance contributions, but broadly speaking, what did the Budget mean

for business? There is very little in terms of new policy. The

Chancellor decided to leave any major policies on business until the

autumn budget which he said will be the UK's main fiscal statement from

now on. Clearly the Office for Budget Responsibility which looks at

forecasts on behalf of the Government said the UK economy will

grow by 2% this year rather than the 1.4% it had predicted. Short-term

improvement. Also on the agenda, it has been mentioned already, European

Central Bank meeting. Everyone wants to keep quantitive easing going, is

that correct? That is right. They will be looking for any sense that

quantitive easing is tapering... It is money being pumped into the

market, helping the fund managers add-in for lighter. It has been

going on since the financial crisis -- ad infinitum. I remember the

tapering tantrum in the US. The same issue for central banks around the

world. We saw the 5% plunge in prices on Thursday, today a slight

stemming of that. Following Tom Ince from the Saudi Arabian oil minister,

the boss of BP was there, planning low oil prices for longer --

following comments. That is the territory we are in. James is

returning later. He will talk more about the Budget and what George

Osborne is up to, earning a pretty penny. Still to come... The inside

track on the Irish company trying to open the door for childhood trains.

Quite literally. We will explain that in a moment. You are with

Business Live on BBC News. First, here in the UK, lots of corporate

stories. The supermarket group Morrisons reporting a rise in annual

profits and sales. The Bradford -based group saw an 11.6% rise in

profits to some ?337 million for 2016 but it has warned of

uncertainties ahead. All of the details for us. Talk us through the

numbers. On the face of it, they were pretty good. Total revenue up

1.2%, reasonable performance. Like-for-like sales up one for 7%.

Underlying profits up a very strong 11.6%. Investors do not seem that

impressed this morning. Morrison share price is down nearly 5%. Maybe

they were expecting more or possibly the warnings of uncertainties ahead

coming to roost. What have Morrisons been doing to get into this

situation? They have been restructuring for the past two

years, closing some stores, particularly smaller ones, they have

sold a stake in the US retailer, the online retailer, they have reduced

debt quite a lot and they have been trying to attract more customers by

keeping prices down. They have partnerships with treble-macro and

Amazon. They are supplying products to Amazon -- with Ocado. This seems

to be reaping rewards. But there are uncertainties ahead.

They say more rocky times ahead, or not? Absolutely, the big one is the

pound sterling. It fell dramatically after the Euro referendum last year,

it hasn't really recovered. Importing produce from abroad then

becomes more expensive the supermarkets and the choices to

allow its air raid their profit margins or pass on the cost of the

consumers. This is a fiercely competitive sector. Aldi and Lidl

mounted a price war on the other supermarkets. It's a rocky road

ahead which the chief executive was talking about this morning. Thank

you. Morrisons with its rise in annual profits and sales.

On the website, more detail on the Budget. You can read more detail on

what the Chancellor and the Shadow Chancellor had to say.

You're watching Business live - our top story.

The de facto head of Samsung has formally pleaded not guilty to

corruption charges as his trial begins in South Korea.

A quick look at how markets are faring.

Markets are slightly lower at the moment, a lot is on the agenda today

including a central bank meeting at the European Central Bank announcing

their latest decision is midday today. Also a story that has just

been breaking coming from emirates, comments coming from them basically

saying that since Donald Trump's travel ban in January it had a

significant impact on the booking rates that they've seen for the

airline to the United States. No surprise to hear that. This is a

quote, the first US travel or the booking by some 35% overnight. Its

effect was instantaneous, that's the news coming from emirates. That

travel ban wasn't allowed to follow through because of legal blocking.

Now, many of you may have grown up believing there were fairies

Well our next guest has turned this fairy tale into a thriving business

moving the mystery visitors into the home.

The Irish Fairy Door Company does exactly "what is says on the tin" -

produces little fairy doors aimed at children from ages

According to the company, one in every two children in Ireland

From making the small wooden doors at the kitchen table,

the business has expanded and more than 150,000 doors have been

sold in 150 different countries worldwide.

Niamh Sherwin Barry, co-founder of The Irish Fairy

Wonderful to see you. And we could have some fairies in the studio! The

keys have all gone so they are somewhere in the studio. Welcome to

the programme. It is a fascinating idea and it's a very simple idea

that sounds like it has been extremely popular. Tell us how it

started. My friend and myself and our husbands got together. We had

seen a tiny door in America and we decided to bring it home to our

children and fairies moved in. That was 2008. The company started in

2013 so we three years in business now. Tell us about the idea. You get

the door and your child then believes the fairy has moved in. The

idea is you pick a name for your ferry and register with us on the

website. You leave the key out overnight. If the key has gone in

the morning the children know the fairy has arrived and it's going to

stay there for ever. It's all very magical land wonderful but the

cynical part of me wants to say I think you have to spend ?20 in order

to get one of these little wooden doors. Is it value for money? What

are we getting for that? A world of imagination. Technology is here, it

has its place but it's taken over. We want to bring the imagination

back. The way we used to play as kids. To actually sit down and usual

imagination. I could sit here all day explaining to you what happens

when a child gets one of these doors. Give one to a child and see

what happens. Their image nation is there for the taking, they aren't

using it enough. If a lovely concept but I'm imagining you pitching this

idea to investors. How did that go, how did you raise the money to get

this off the ground? Irish people are storytellers so we had a lot of

interest from home. We had been hit really badly by the recession so we

had no money to invest. My mum and my dad gave us the money, the

original start-up, 8500 year rose. She stopped is -- she had stopped

smoking and the money she saved she gave to us to stop the company. You

are selling in 150 countries around the world, you aren't really

established yet in the UK. We are getting there. We've been here for

about a year but we would be more in the small independent stores. There

are more levers up north. I think you're more cynical down this way.

What happens when your child realises it wasn't real? The way I

feel about it, it's very clear in my mind. Our keen unity of believers

would say the same thing. Imagination should be promoted, it

is part of childhood -- our keen unity. The benefits far outweighs

when they are ready to realise and move on. I think the benefit

outweighs the actual point. Do you have a fairy? Fairies are trained in

school to collect teeth so it's part of their duties! It's been

fascinating! My imagination is running wild.

In the UK - the Finance Minister, or Chancellor as he's known here,

Philip Hammond has defended his 2% hike on National Insurance

contributions, that's a form of tax that all employees have to pay that

go towards state benefits, insisting it will result

in the self-employed making a "fair contribution" to public services.

The Chancellor is coming under pressure from many

to rethink the tax change to 2.5 million

Speaking on the BBC's breakfast programme this morning

the Chancellor denied his critics that his tax policy

I don't accept that are all and we strongly support small businesses,

growing businesses, they are the bedrock of Britain's economy. We

will continue to encourage new ventures, innovation, growing

businesses in this economy. What we are dealing with here is a perverse

incentive in our tax and national insurance system which is driving

people who are essentially employees to turn themselves into

self-employed workers instead. That isn't good for them, it's not a

healthy thing for the structure of the economy to be driven by tax

advantages and tax differences. We've asked James to talk about his

paper's take on the Budget. I think there's a feeling that the

Chancellor has an wound manifesto pledges by David Cameron the former

Prime Minister. We aren't surprised to hear it are we? There has been a

change at the top but this is a government elected by the people in

2015. Although there's been a change in leadership and a changing

Chancellor, this is very much the same... This is very much the same

administration. Those pledges made in 2015... The reason for the anger

is the question, is this a fair closure of the gap between the

different the employed and self-employed pay in tax or is it an

attack on the risk-taking spirit out there? Our paper had the headline a

tax on enterprise. The Tory party supposed to stand up for people who

want to make money and better themselves. George Osborne earning

?650,000 for four days work a month. We asked viewers to get in touch

about this. We've had some input. Paul says, if you believe in

capitalism then George Osborne is allowed to earn what people are

willing to pay him. He is earning ?14,000 a day.