18/01/2017 Asia Business Report


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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




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