27/10/2016 Asia Business Report

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

The ousted boss fights back. More on the e-mail which lifts the lid on

India's Tata group. The Indonesian finance minister vows to hunt down

tax avoiders, speaking exclusively with the BBC. I am going to chase

you wherever you are going to go and hide your assets. I am going to also

ask international community to support this effort.

Welcome to this edition of Asia Business Report.

The ousted chairman of India's Tata group lashed out at the way his

sudden departure was handled. In a no holds barred e-mail to the board

seen by the BBC, he says he became a lame duck chairman and alleges

constant interference including being asked to sign off on deals he

knew little about. He warned the company risks huge write-downs

across the business. Our correspondent in Mumbai has more. It

is turning out to be a dramatic turn of events for Tata. Cyrus Mistry has

made shocking allegations in a letter written to them, and in it he

says he was never given a free hand to operate as chairman and he says

he was a lame duck chairman. He alleges that he was the previous

chairman of the group and also interim in charge, he says he

interfered with major decisions and it was on Mr Tata's insistence that

Cyrus Mistry went ahead with a tie-up with AirAsia to form AirAsia

India, domestic airline company here, alleging there were ethical

concerns about some of their dealings involving that company. The

letter is also an indicator of just how much trouble Tata's businesses

are in. He says apart from Jaguar Land Rover and Tetley tea, all of

the other companies are struggling. He says it he inherited a host of

debtridden companies and he strongly defended his actions to try and cut

loss-making ventures. As we know, in May, Tata initiated the UK steel

business and want a joint-venture partner. It has sold off many assets

in its hotels company. And so he says he cannot believe he was sacked

for nonperformance. Now, the Tata group says so far it has no comment

on these allegations. To put the story in context, Tata is a company

that in India is seen as a respectable firm. Many people here

are proud of the brand, seen as a socially responsible company, so for

these allegations to come out in public is of course a major cause of

concern for anyone connected with Tata, whether it is employees or

investors. Many would say it is also a sad development.

The national stock exchange has confirmed with the BBC that it has

soared clarification from Tata about allegations made from Cyrus Mistry

-- sought. Samsung's bottom line was burned by the Galaxy Note 7 scandal.

The world is that large a smartphone maker has written a $5 billion in

legal expenses and lost sales. Operating profit has fallen by 30%

for the period from July - September, that is compared to the

same quarter last year. The company says is confident things will pick

up in the next period. Earlier, Jake Saunders from ABI research told me

why Samsung's rivals haven't been able to take advantage of Galaxy

Note 7 issues. In this interconnected world, you get a

phone from Apple, not all components are made by Apple, and one of the

ironies is one of the suppliers of the screen is Samsung. So, there are

compliant and contract orders but it is difficult to find alternative

suppliers, for example, Sharp, they could step in, they have contract

volumes, this is the time for production because fourth quarter is

when you sell the big chunk of phones. With this tremendous loss

for Samsung Electronics and the reputational damage, could we see a

Samsung Electronics being split two ways, which has been advocated by

some shareholder activists? There is that agitation. They want to get

past the Note 7, because next year in February time, we should see the

announcements for the S8 smartphone, which is their big flagship phone,

that is coming out, they need to get the story behind it, but there are

around 800,000 Note 7s out there. Should they come out with the S8 or

a brand-new phone? The S8 is the smartphone, the Note 7 is the

phablet. There is debate if it will come out. I think they want to keep

the sub rant in place. -- brand. Indonesia is trying to reform the

tax system as part of that tax amnesty programme. In any clues

interview Indonesia's finance minister told our correspondent the

government will go after tax avoiders inside out outside of the

country once the amnesty programme ends. Indonesia has a low tax ratio.

Even if you compare with the same middle income country or even low

income country, that is not acceptable. It is incredibly low,

isn't it? It is only 10.9%. You've received a lot of praise for the tax

amnesty programme Indonesia is carrying out. Citibank saying it is

one of the best in the world, but it has been very controversial in

Indonesia with demonstrations on the streets, protesting on social media

and challenges in the constitutional court for people who say it is an

unfair system and is effectively pardoning people who have been

dodging paying tax for years. How do you ethically justified the

programme? This is nine months which we will declare it is your

opportunity and it is up to you. After that, the states have the

power -- the state has the power to in force to hundred % fine or I am

going to chase you wherever you go and hide your asset. I am also going

to ask the international community to support this effort, because I

don't want to hear that taxpayers can easily evade and hide their

income and their assets safely in a tax haven without any consequence. I

think it is not fair for many countries in the world. And also it

is not fair for many taxpayers of different countries. They also

contribute a lot of development support to developing countries.

Taxpayers want to see this work will have a much more just... In terms of

tax enforcement. The Indonesian tax minister speaking with our

correspondent. Now to the US election and China has featured

heavily in it with the Republican candidate Donald Trump accusing it

of stealing US jobs and threatening to impose tariffs. The democratic

nominee Hillary Clinton has promised tougher enforcement of existing

trade laws, so with less than two weeks to go until polling day, what

effect has China's rise had the US job market? Year is McDonald. On one

estimate the trade deficit with China is responsible for displacing

3.2 million jobs in the US -- here is Mr McDonald. Now, China has been

accused of manipulating its currency of subsidies, labour rights and

dumping massive amounts of products like aluminium onto the global

market. Something like that has had an impact here on the industry. We

lost 847 union jobs, well paying jobs, good benefits, a lot of people

are still laid off because they couldn't find jobs and some of the

people have moved. I think the dumping of materials, from China,

whether it is aluminium, steel, tyres, they are flooding our

markets. What happened with aluminium I believe is a direct

result from the dumping of materials here at this facility. We have a lot

of people that are unemployed. There are no jobs. US manufacturing is way

down. China is still the world's factory floor but its economy is

maturing. Wages are rising, it is no longer as cheap as it once was. In

fact, even some Chinese companies now see the advantage of setting up

shop here in the US. One of them is China's largest automotive glass

manufacturer that now has a factory in Ohio that employs more than 2000

people. Natural gas in China costs about four times what it does here

per unit. And electricity is about double. Our customers love the fact

that we are right down the road, not across the ocean, which eliminates

the cost as well, it eliminates ? and shipping costs. Labour is

significantly different. Multiples different. We have defined ways to

deal with that. You have to look at our factory, versus the setup of the

factories in China, and you would find there is more automation in

this factory. This is real investment and real manufacturing

capacity capability and technology with real jobs for real people.

Between 20- 25% of the US market should be produced title this

facility. China's impact on the labour market has been a hot topic

through the election and it is clear that the next president will have

their hands full not just managing the world's largest economy but also

its relationship with the world's second largest.

Timothy McDonald. Thank you so much for investing your time with us. I'm

Rico Hizon. Sport Today is up next. President Rodrigo Duterte

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to leave his country Doubt over Formula's One's

future in Malaysia.