29/06/2017 Asia Business Report

The BBC understands that the retired Court of Appeal judge -

Sir Martin Moore-Bick - will be appointed head of the public

inquiry into the Grenfell Tower fire.

The plot thickens in the saga over who will buy Toshiba's lucrative

memory chip business. We look back at what Malaysia did different to

survive the financial crisis 20 years ago, but was it the right

move? Good morning, Asia. Hello, world. It is Thursday. I'm Rico

Hizon. Well, it is going from bad to worse for Toshiba. It is suing its

US joint-venture partner Western Digital four 8 billion US dollars in

damages for interfering in the sale of the memory chip division. Toshiba

will not allow Western Digital employees at its Japanese plant to

access any information relating to the companies' joint-venture.

Toshiba faced angry shareholders at the annual meeting on Tuesday. The

firm hasn't said exactly how much money it lost last fiscal year

because it's watered at hasn't approved the figures. Let's hear

what some of the investors had to say. TRANSLATION: I cannot believe

how many times they postponed the results. It is a serious problem.

TRANSLATION: I want the company to rebuild even if it downsizes its

business. Toshiba chose a government led consortium as its preferred

bidder and it was hoping to conclude before yesterday's meeting. Are they

running out of time? I asked Leo Lewis from the Financial Times what

will happen to the government led deal. It is not dead in the water.

They will push it pretty hard. As you have heard and described, these

different things going on signal how severe the situation is for Toshiba

and the worse they get the more they push for a deal of some sort and

this still looks, this government backed INCJ consortium looks like

the best option. We mentioned Toshiba says Western Digital is

interfering and dead set against the sale. Are they still a likely

suitor? They have come up with another bid. That's right. If you

look at the interchange, this legal battle, escalating battle between

Western Digital and Toshiba, you see both sides signalling their

desperation. A bad deal isn't good for either of them. I think that

Western Digital are still in there. When they resubmitted the bid

earlier this week it clearly was the reason that these negotiations were

delayed and Toshiba was unable to say as it wanted to at the

shareholders meeting that we have a deal signed and we will be okayed by

next year. Leo Lewis from the Financial Times in Tokyo.

Companies around the world are trying to recover from the latest

cyber attack including and transport networks including

shipping giant Maersk. The attack is contained party system

is down and we have to make sure that we can have the software put in

place to prevent such an attack from occurring again and also that we

don't want to get the systems backup to see the infection start again.

Their ships are operational, they are sailing safely. They do not rely

on the same network as we do. There are a number of processes we cannot

run today. We cannot take new orders and some terminals are affected in

their operation. In other news: making headlines, Rupert Murdoch

will find out later today whether he is closer to securing takeover

target Sky. Murdoch's 21st Century Fox offered $15 billion to buy the

rest of the network, reigniting a row over whether the Australian-born

businessman has too much influence. Turning to aviation and India's

Cabinet will privatise air India. A committee will be formed to decide

the details including the size of the government stake to be sold. The

debtladen carrier has struggled to become profitable due to growing

competition from low-cost rivals. And as we have been reporting all

week it has been 20 years since a financial crisis or a three stage.

While regional currencies were tumbling Malaysia went against

conventional wisdom, implementing capital controls and sparking an

outcry from the international financial community. In the short

term this helped lessen economic damage but what about the long-term?

Christine Hart made that decision, the former Prime Minister on whether

he indeed did the right thing. A constant buzz of activity. This

company makes cranes and lifting equipment for industrial sites

across Asia. Last year they opened the largest manufacturing facility

in Southeast Asia. 20 years ago its business ranked almost 70% in a

matter of months. This man was starting out in the family business

in Malaysia which included the company. We were seeing first

customers come back and saying we probably can't take delivery, or we

will take delivery but we cannot pay the final bill. In that year, '97,

the damage when we looked at our books, will always be in our

memories as the worst ever. But things looked very different at

street level. This man has run the store for 46 years and says he did

not feel the effects of the Asian financial crisis. TRANSLATION:

Business today is not as good as it was in 1997. Under Mahathir, things

were better. Then the Prime Minister, Mahathir Mohamad, refused

a bailout, and in September 1998 implemented capital controls

stopping offshore trade and taking it to the dollar. It was a very

frightening thing, to go against the whole world, all of the great

opinions of the great economies and all that, it is not something that

you do everyday. But I found that there is no other way. So it is a

big risk, I know, but I had to take that risk. As a result of our

currency control, we recovered very quickly. Now, if you ask around

here, most people will tell you that they didn't feel the effects of the

Asian financial crisis that much. At 20 years on there are some who say

that Malaysia missed a golden opportunity for reform which would

have put it in a better position today. This is GDP growth. This

economist tells me capital controls sheltered Malaysia from the worst of

the IMF's austerity measures. But it let the government continue with an

economic policy favouring the Indigenous Malaysian population and

allowed bail outs of ailing state-owned companies and banks. All

of this hurt Malaysia in the long run. We did have a head start but

the economy was growing much faster than them, so after what happened to

Malaysia. It is a question as relevant today as it was two decades

ago. All of this week we revisit the

country's hardest hit by the Asian financial crisis and we have heard

stories of survival. What lessons have learnt from the economic

meltdown? I put it to an economist at the monetary authority of

Singapore during the crisis. Since the crisis they have taken a lot of

measures, very painful measures, to reform the economy, rebuilt

foundations for growth, and also strengthening fundamentals. The

fundamentals from then and now are different, with geopolitical issues,

you have Brexit, potential US protectionism, a slowdown in Chinese

economic growth, could these be risks for another financial turmoil?

Certainly, I mean, they are risks and you need to constantly adapt

your monetary policy framework, your economic fundamentals. That's what

the countries have been doing. For instance, during the global

financial crisis they were able to weather the crisis relatively

unscathed. And that's because longer way they adopted prudential policies

to deal with all of our capital flows. So, the region has been doing

a lot of work on the economy to make it more resilient. We are seeing

signs of a potential crisis brewing? Well, at the moment it has receded

somewhat, but there is risk of protectionism which would be

damaging to global trade and there is always the risk of financial

turbulence and we just saw a cyber attack as a possible risk now, so

these new risks are merging. The best way is for the region to be

more resilient, develop buffers, strengthen the fundamentals. We have

seen the likes of Thailand, Malaysia, the Philippines growing

over the last 20 years. Is that growth secured over the next five to

ten years? I'm quite comfortable that it will be able to secure and

grow around 5% over the next five years and they can even do better

than that. And the main reason I am saying that is because the region

has become much more self-sufficient. They are less

dependent on the west and Europe. After the global financial crisis

they rebalanced to become much more self-sufficient. And don't forget to

tune into the special programme playing out at the weekend starting

on Saturday and tomorrow we have the Philippines focusing on the people

who suffered during the Asian financial crisis. So, watch out for

that, and a quick look at markets - Asia is off to a positive start this

Thursday. Tokyo stocks opening higher with banks rallying following

strong performances from their US peers. Thank you so much for

investing your