18/01/2017 Asia Business Report

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

The de facto head of the Samsung empire could face arrest over a

major corruption scandal. And Brexit means Brexit, the pound surges after

UK Prime Minister Theresa May vows to quit the European Union. Good

morning, welcome to Asia Business Report, live from Singapore, with

me, Mariko Oi. The head of Samsung, JY Lee, has arrived at a South

Korean court and the judge will be deciding today whether he should be

arrested over his alleged involvement in a major corruption

scandal. For the latest, let's go live to Kevin Kim in Seoul. Thank

you for joining us this morning. This is a huge deal, isn't it? But

when are we expecting the outcome, and are there any hints what the

judge might decide? Well, we will probably be hearing the results

later tonight, or possibly even tomorrow. JY Lee, the head of

Samsung, was seen arriving in court with a grim faced, and the judge

will soon be hearing the arguments. Prosecutors believe Samsung has

committed bribery and has asked JY Lee, the head of South Korea's

largest company, to be jailed. The allegation is that Samsung gave

millions of dollars in return for the votes of the national pension

fund, in a bid and contested restructuring of the company. Last

week JY Lee was summoned as a suspect and was questioned for

almost 24 hours. After filing an arrest warrant on Monday,

investigators said in a news conference that, despite some

concerns that JY Lee's arrest may have a negative effect on the

economy, establishing justice was more important. I mean, we have seen

some of the business leaders of big conglomerates in South Korea being

in trouble with the authorities before, but is it fair to say that

this is the first time that he could actually be jailed? Well, if JY Lee

does get detained, it will be a big blow to the image of the company. So

far no member of the Samsung family has ever spent time behind bars. His

arrest may not affect short-term production or the running of the

firm but there does seem to be a growing anxiety of the long-term

implications. Samsung is one of the biggest electronic companies in the

world, and for the head of the company involved in a corruption

scandal, would be seen as a huge embarrassment. Thank you so much for

updating us, Kevin Kim in Seoul, and I'm sure you will be across the

story as we find out more. You know you are in strange times when the

head of Communist China speaks passionately about free trade around

the world, while America's president in waiting speaks equally

passionately about the damage it does. Xi Jinping's address to the

World Economic Forum, in Davos, focused on economic growth. Here is

what we had to say. TRANSLATION: We must remain committed to developing

free trade and investment, promote trade and investment liberalisation

and facilitation, through opening up, and say no to protectionism. No

one will emerge as a winner in a trade war. President Xi Jinping

speaking at the World Economic Forum in Davos. It is actually the first

time a Chinese leader has attended the gathering, and fought China,

finally -- finding its voice on the global economic stage. So in the

wake of the Chinese President's speech in Davos, a little bit of

irony has come into play. Is it not normally the United States, the

leader of the free world, which is championing globalisation and the

opening of Borders? No, it appears that the United States is more in a

mood to put up some walls and create barriers. Meanwhile, China, of

course, historically much more closed in terms of trade, but it

benefited enormously from globalisation, is now saying

globalisation is a good thing. Describes it as Pandora's box, once

opened, many things may come out, some good and some bad but it is

really a question of managing those bad things. Xi Jinping described the

global economy as an ocean in which China had struggled at times to get

and to survive, but now had learnt to swim and it was absolutely not

time to retreat to the creeks and small rivers of the globe. Another

big topic in da Boss is the UK's decision to leave the European

Union. -- Davos. And British prime Minister Theresa May has revealed

her long-awaited plan for Brexit. She has made clear that the UK will

quit the single European market as part of moves to control immigration

but she insisted that the British government would not turn its back

on Europe. The Prime Minister says she wants a trade deal with the

other 27 members of the European Union, under what is called a

Customs agreement. But she is warning that the UK could walk away

if it is a bad deal. Here is what she had to say. Not partial

ownership of the European Union, associate them to ship of the

European Union, or anything that leaves us half in, half out. I want

to be clear. What I am proposing cannot mean membership of the single

market. Business leaders are still divided on the implications of

Brexit, but most of them seemed to welcome at least some clarity from

the prime Minister -- membership. Our business editor has been talking

to some of them in Davos. There is nothing like a bit of mountain air

to give you clarity. Business leaders gathered in Switzerland were

watching the prime minister for exactly that. Did they get it?

Clarity, first of all. Really codify in what many of us are expecting

around the result, particularly around the single market. We are

also seeing the government's willingness to put a bit of edge

into the negotiating dynamic. That makes a lot of sense. Trade

negotiations are negotiations and you have to be pretty tough to get

what you want. For some, the uncertainty is still too great. In

London, the insurance market has already decided to move some

business to Europe. We still have to pursue a subsidiary in the EU for

post- Brexit world, meaning that we can still serve our customers and

policyholders in those European Union countries. So no ifs, no buts,

no single market. Clarity, yes. Desired outcome, not for everyone.

And with the continued argument over whether we are a partial member of

the customs union, many companies will say it takes a continent to

build a car and if there are hold-ups at the border that could be

bad news. And the car industry gave MPs its version of clarity. The cars

that we import, and remember we import about 80% of the vehicles we

sell in the UK, that would add about ?2.7 billion, or about ?1500 per car

sold. Financial markets were watching closely as well. Suddenly

the pound rocketed against the dollar, at the very moment the prime

Minister offered MPs a chance to vote on any final deal, markets

making one last bet that Brexit could still be derailed. But even

some of the business world's staunchest remainers weren't fooled,

and a knuckling down to the political reality. Most businesses

are trying to move forward positively, trying to ensure that

the complexity of this is well understood and we take the steps

both in government and business to deal with this and minimise the

impact of this very complex process. Government shed some light on its

priorities, but his listeners we are still in the foothills of a massive

undertaking. -- business knows we are still in the foothills. In other

business news, shares in Toshiba are rising by as much as 5% in Tokyo

after the company said it is considering a spin-off of its

semiconductor business to raise money. According to the Nikkei

newspaper, it may also sell a 20% stake in the unit to Western Digital

for $2.7 billion. Facebook founder Mark Zuckerberg has denied a

suggestion that its toll virtual reality technology from a rival

firm. He faced hours of tough questioning on Tuesday. Earlier our

North American technology reporter provided more details about the

case. Mark Zuckerberg was on the stand wearing not his typical grey

T-shirt but a full suit and tie and while he was there his company,

Facebook, was accused of essentially stealing technology from another

firm, which worked very closely with Oculus, the virtual reality firm, in

its early days and the company says it was their input which made the

did buy the company for $2 billion Facebook wanted

in 2014 and shortly after that deal, a lawsuit. Mark Zuckerberg, on the

stand, said it is typical when a big deal is made for companies to come

out the woodwork and claim some kind of credit for that work. He said all

the innovation in that headset was done by the oculus team, and the

Oculus team alone. The trial will last for about three weeks. Let's

show you markets before we go. This is how Asian markets have started

trading this morning, taking the cue from Wall Street and opening lower.

That's it for this edition of Asia Business Report. Thank you for

watching.