26/04/2017 Asia Business Report

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

The Bank of Japan meets, as things go from bad to worse for corporate

Japan. We discussed the problems, and what needs to be done. And the

of South Korea's election, we hear from whistleblowers in the culture

of corruption which roared down the President. It is Wednesday. Good

morning, Asia, hello, world. Glad you could join us for Asia Business

Report. I am Rico Hizon. We start with Japan, and companies there are

making headlines for all the wrong reasons. Fuji has delayed its most

recent earnings report after discovering accounting is

regularities, and Toshiba is restructuring its business after the

collapse of its nuclear business. Is the Japan central bank doing enough

to reform corporate governance? I asked our correspondent in Tokyo.

The reason for the problem is very deep. I would say it is cultural,

but there is regulation to it. First of all I think the Japanese

government, as well as its regulating agency, tend to be very

protective over each company. So the companies tend to be relaxed

regarding their structure. And there has been a call right now for more

globalisation of Japanese companies. They need to invest in foreign

talent. Some of the major companies in Japan have already done this, but

why is it taking such a long time? The focus of the management the

sustainability of the company, and also the profitability of the

company, is relatively weak. I would say there is more equity hold

activism required in Japan. But I think there has been some incidents

of foreign activist shareholder attacking Japanese companies, urging

them to become more profitable but usually there is intervention from

the government, and also media is fairly hostile against this foreign

pressure for the companies to reform. Reform is indeed one of the

pillars of the Prime Minister and his Abenomics programme. Where are

we right now in terms of this reform programme and improving corporate

governance? Well, improving corporate governance has been one of

the poster children of the Abenomics policies. And it used to be that the

Japanese government, especially the FSA, has been very proud of the

reforms they have introduced, but looking at Toshiba, looking at other

companies which are making negative headlines, I think we must say that

the corporate governance reform has failed in Japan. In other business

news making headlines, American beverage giant Coca-Cola will cut

about 1200 jobs due to falling demand for its fizzy drinks. The

bulk of the redundancies will be in Atlanta, where it has around 10,000

employees. Global sales fell by 1% in the quarter to March. Rival

Pepsico's sales have also taken a hit as consumers in North America

increasingly turn away from sugary drinks. Shing Singapore has retained

its crown as the Maritime capital of the world, in a biannual ranking. It

has topped the tables. There is not much to celebrate, though. The

global slowdown in trade and an excess supply of trips have cut

trade. Our business reporter joins us. Is it a busy port this morning?

A lot of challenges for the global shipping industry, but Singapore is

resilient. That's right, not very busy today, but it is a very major

port in the world, and we are joined exclusively to talk about that

ranking. With the Norwegian consultancy. Its chairman joins us.

Can you tell us how, despite the downturn in the last few years,

Singapore has managed to retain the number one spot? That is an

interesting question. Even though Singapore has gone through different

difficult times. The other top services have suffered even more.

Hamburg has had a very hard time due to the low rates in container

shipping. Oslo has been hard hit by the oil price, compared with

Singapore. Shanghai has not achieved the growth that we expected, due to

the slowdown of the Chinese economy. And the slowdown of the world

economy, so their shipbuilding has been less than expected. And Hong

Kong, which was a highroller, has lost its ranking to other South

Chinese cities. And they are not as important as they were as a gateway

to China. So London is kind of the only city that hasn't really

suffered from these different factors. They have climbed on the

rankings. You use four metrics or pillars to determine this ranking.

Can you run through that? Lie yes, we look at 30 cities, they are

ranked on objective indicators, and then benchmarked by 260 Maritime

experts all over the world, and they were benchmarked on four pillars in

the maritime industry. Shipping, maritime finance and law, maritime

technology, culture and logistics, and the fifth pillar is the

attractiveness of the city in itself. So we put all the rankings

together, Singapore is number one on three of five pillars and altogether

Singapore is the Maritime capital of the world. And briefly, this

industry downturn, when can be expected to turn around, two years,

three years? Well, the industry will recover with different speeds in

different places. But I believe two or three years from now things will

look a lot that are. Thank you so much for your insights. Well, it

looks like there will be an uptick, at a different paces, as we have

just said. Thank you so much for joining us, and all this week it is

Singapore maritime week. And moving on now to South Korea's presidential

election, it is drawing near, and questions are being raised about how

corruption in the country was allowed to flourish at the highest

levels of business and government. It brought down the President, what

will the election mean change? Our correspondent has more from Seoul on

WADA so rare for employees to speak up. Get up, get on the train, go to

work, repeat. It is this uniform, structured formula which has helped

to create the massive conglomerates here. In order to succeed, you have

to follow the rules. Speaking at a term means you might pay a high

price. The 2017 whistleblowers awards. It is an exclusive club that

nobody really wants to join. This man said he date motors tried to

cover up engine defects while he worked there. -- Hyundai.

TRANSLATION: Look at me now. I am fired and won't be able to find

another job. Before I had a high salary with stable employment, but

with my retirement, it is passed to someone younger, with many years

ahead. Those who speak out now they are marked. This man is the leader

of a Samsung union which isn't really recognised by the company. He

says it is the structure of companies which leaves workers

powerless. TRANSLATION: I realise this group management structure

meant nothing could be addressed without approval from the very top.

It is a problem rooted in economic history. The founding families used

shareholdings to raise funds and expand. Put very simply, they would

use capital paid by listed shares in company to buy stakes in company B,

and a third company, and so on and on until you get this, which gave

founding families disproportionate controls through their stakes. Every

week, this man leads a small union meeting for staff. He was fired when

he reported his firm for deliberately overcharging customers.

He fought his case in court, and won. TRANSLATION: I am now famous as

a whistleblower. I have one law suits against KT. Now no one bothers

me, not even my boss. I am untouchable. It is only the rare few

who have nothing to lose who dare speak out. Until that changes,

corruption go unchecked, all the way to the top. We have 35 seconds to

give you an update on the markets, and it is so far another positive

day for Asia in mid-morning Asia trade. Solid US earnings,

speculation about US tax reform, and reduced chances of a US government

shut down this weekend boosting investor optimism. The 225 up by 135

points and the all ordinaries index gaining 38 points as well due to

gains in oil prices. Thank you so much for investing your time with

us. Have a wonderful Wednesday. I am Rico Hizon, goodbye for now.