28/02/2017 BBC Business Live


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This is Business Live from BBC News with Sally Bundock and Rachel Horne.


The scandal engulfing Samsung has come to a head as the heir


to the business is charged with bribery, and three


Live from London, that's our top story on Tuesday, 27th February.


South Korean prosecutors have confirmed they will charge this man


Jay Y Lee, the third generation leader of Samsung,


The scandal has rocked South Korea to its core.


We'll have the latest from our team in the region.


One of the world's fastest growing economies gives


it's latest growth - the first numbers on the last


quarter since the cash crisis that caused growth to stall.


All of the market are headed higher -- markets are heading higher. And


we will have the latest Donald Trump pump. -- and we will have the latest


on Trump pump in Europe. And are you cycling enthusiast


but fed up with wearing lycra? We'll be speaking to the man


who is trying to revolutionize As the Samsung scandal


continues we want to know - do headlines like these


affect your shopping habits? If Samsung or people


associated with it are found guilty of bribery -


would it stop you Just use the hashtag bbc bizlive -


would you avoid samsung products. Apologies for saying it is the 27th


of February, it is the 28th of February today. We start with this


man behind Mika McGettigan making headlines for the wrong reasons.


After weeks of uncertainty one of the world's biggest companies is


seeing the man who is in charge indicted by South Korean prosecutors


on charges of bribery and embezzlement.


This is Jay Y Lee being taken in for questioning


earlier this month - it's part of a wide-ranging


corruption scandal which has seen the president impeached.


Prosecutors allege Mr Lee gave donations worth about $36m


to organisations linked to a close friend of president Park Geun-hye.


The prosecutors say this was done to get government support


for a controversial $8bn merger between two


At a parliamentary hearing in December Samsung admitted giving


about $18 million to two non-profit foundations but denies


seeking favours in return and any wrongdoing.


Four other Samsung executives have also been charged


Three of them have now resigned from Samsung's corporate strategy


office which oversees the activities of the dozens of Samsung companies.


Ashleigh Ngheim is in our Asia Business Hub in Singapore.


This story has been unfolding in more details at the last couple of


hours, bring us up to scratch. It all emerged after South Korean


prosecutors held a press conference confirming as you say, charges would


be laid against Samsung's boss as one of those four executives. Three


of whom you have now resigned. Essential to this case is the claim


that Samsung's boss, Jay Y Lee, met the South Korean president in a


private meeting just between the two of them. It's claimed that they


agreed Samsung would pay millions of dollars to the friend of the


president, who would then get South Korea's National pension fund to


bank a major restructure in favour of Mr Lee and to help the family


shore up their control of the company. Critics say that was the


one goal that was to come out of that meeting for the company. Thanks


very much. Geoffrey Cain is a journalist


who spent five years in Seoul and is now writing


a book about Samsung. He joins us from Yuma,


Arizona in the United States. Thank you for joining us this


morning. It's been a terrible year of headlines for Samsung. We had all


of the issues with the Note seven phone. If you could their share


price of the electronics company, it is almost 50% up in the past year.


What is the story of this company? This is a unique company in that it


has managed to split its business operations, the things that it


makes, the phones, the televisions, from the leadership, from the


dynastic, from the government's problems. It's interesting what is


happening because we have these smoking phones which just happened.


Now we are having these problems with Jay Y Lee, the heir to the


Samsung throne, who is now in jail awaiting trial most likely. We are


seeing a complete disconnect. Investors have confidence in


Samsung. Consumers still like their products. Its profits and shares are


still quite high. This is a company that goes a lot of the business


wisdom out there. If Jay Y Lee this found guilty, what could this mean


for Samsung? Because he was being groomed to take over. Samsung


probably will be fine. The share price is pretty high as you


mentioned. It looks like it is still going up. Galaxy eight is slated to


be released sometime soon. This is a company that does have a good future


ahead of it when you look at the products and all of the lines it


makes. The thing Jay Y Lee is, -- the thing is Jay Y Lee made a


sweeping change. It is looking like the company will be shaking things


up a bit. It isn't very clear how this will trickle down to the people


in the field, to the officers themselves, but it looks like most


of these offices are able to run themselves regardless of what is


happening up top. Looking ahead for the company, to their future, you


mentioned they've been successful in separating their business. Investors


don't seem bothered about the issues with the phones all the scandal. Do


you think the future for Samsung is still quite possible? Overall it is


quite positive. Samsung is a diversified conglomerate. It makes


everything from chips to chips. A lot of success rides on the fact it


doesn't just make phones. If you are Apple and a flagship product fails


you might be in trouble. If you were IDM -- IBM Microsoft and Windows


fails, there could be problems. But the phones will decline and then the


sum -- semiconductors they make my debate in the second quarter. You


have this floating effect where one product rises and another falls, and


it goes through the cycle over and over. It is a cycle Samsung has gone


through four decades and they've always come out of it despite the


conviction of the current chairman. He was convicted twice of


white-collar crimes. He was pardoned by two a separate presidents. The


founder of Samsung had trouble. Yeah, I think the company itself


will be fine. Thank you for joining us this morning.


A senior engineer has left ride sharing company Uber just


Amit Singhal failed to disclose that he faced accusations of sexual


harassment in his last job at Google.


His departure comes days after Uber promised to investigate separate


claims of sexual harassment at the company.


Greece is holding yet more talks to try and get to the next stage


Inspectors for the European Union, European Central Bank


and International Monetary Fund are in Athens trying to finalise


reforms with the government so that it can be given the next


chunk of money which will help it avoid bankruptcy as it continues


to struggle with more than $300 billion of debt.


Lots of stories on the website, including this one about space X.


Two tourists have put their place to travel 3000 miles -- 300,000 miles


to the moon and back. -- SpaceX. If I put my children and that rocket


I would make amazing childcare savings.


Where am I going to day mummy? To the moon and back.


CHUCKLES In a few hours time we'll find out


how the Indian economy is faring. Could the world's second most


populated country become the engine This is really important data, isn't


it, coming out today? It's the first time we will get a look at October,


November and December for India which is when the cash crisis kicked


in. That's right. Very crucial piece of data that will be released later


today. These figures are for the period from October to December 20


16. The government put a ban on those notes starting December. --


starting November. You'll get a first picture of how that move


impacted the economy on the ground. And how much time will it take for


the recovery. India was the fastest growing economy. It surpassed China


over the past few quarters. Most economists now expect this latest


figure will be somewhere above 6%. Many think it could be lower. It


will lose its tag as the fastest-growing economy if it is in


that range. Thanks very much. One story in town today as far as the


markets are concerned. The Dow Jones closing for 12 days in a row at a


record high. The first time it's done that for some 30 years. And it


is all about President Trump. What will he say later today when he


addresses both houses of Congress? Many are expecting a 10% boost to


defence and different stocks are doing well. Let's move on to the


European markets if we can. London... Bae up around 2% on the


FTSE 100. We cannot bring you the figures for some reason. We will do


it in a moment when we look ahead to the European markets.


Michelle Fleury has the details about what's ahead


Wall Street will be paying close attention when Donald Trump


addresses Congress later this Tuesday. What are they looking for


from his speech? More details on the Budget and how he plans to move


forward on tax reform and infrastructure spending. While the


president is popular among investors he has historically low approval


ratings among voters. The US conference board 's confidence index


will view confidence in him. Economists are forecasting a dip.


And how Americans feel can affect their spending habits. Will that


help or hurt retail targets which reports fourth-quarter earnings this


Tuesday. There has already been an early warning that the holiday


season was disappointing. Thank you.


Joining us is James Hughes the Chief Market Analyst from GKFX.


The US markets have had almost a 30 year winning streak. Trump is


talking tonight. What are we expecting? We can expect anything


because it is Donald Trump. Interestingly we expected fiscal


policy today. That's the information we wanted. However yesterday, Trump,


as he likes to do, randomly come out and speak, he said yesterday that he


isn't going to mention anything about potential tax cuts today. That


is something we've all been waiting for. That is one of the big reasons


why these markets have been rallying, particularly the Dow


Jones, because we've seen strong rallies. There have been good,


corporate performances but it has all been on the back of potential,


very bullish fiscal policy, which is very stimulant to the markets, to


the overall stock markets. We are still waiting for that news? Donald


Trump said yesterday he wouldn't say it, but that does not mean he won't,


because he will say what he likes. The fact we have Trump at the moment


really dictating the markets means that the way people are trading is


completely different to how it usually is. Looking at the European


markets, we have the numbers now, edging up slightly. In Europe we


have that meeting with Greece and Finance ministers, we've already


mentioned that, but is everybody just really focused on the US later


today? And also this fourth-quarter GDP number coming, the second


estimate, which will give us an idea of how well the US economy is doing


right now. Absolutely. It is difficult to look at anything other


than Donald Trump and everything coming out of the US. We don't just


have Trump, but we have the Fed ramping up for a rate hike. Europe


is an important one to look at. Especially with a discrete mass. We


know that the IMF and the ECB are having talks about the fact that


Greece won't meet any of their targets. Yet we will keep pumping


money in regardless. That is what happens every time we get this


situation with Greece. It will continue to happen until Greece


finally does go bankrupt or the euro falls apart. There is a focus on


that. What is different to any other time was that with Donald Trump in


the White House we are far more focused on the White House and what


comes out of it, more than we ever would be. We don't normally care


about politics. But with Trump in the White House it is the


uncertainty which causes so much movement. With Trump in the White


House it changes the way traders work, you said, how has your job


changed since he has become president? We are looking at twitter


all day long instead of the markets. Those things are driving us. Your


daily could be quite regimented. You would look towards the economic


calendar, what is coming out of the US, out of Europe, but now, we know


Trump wakes up because he sends a tweet first thing. From there until


the end of the trading session, or until he goes to bed, we know that


anything can come out. At the moment markets are latching onto everything


he says. Does that make your life more interesting or more stressful?


Both. Thanks very much. Now a look at some of the stories


from around the UK. The telecoms regulator, Ofcom,


says it will take action to cut the bills of those who only


have a landline with BT. Theo Leggett joins us from


the Business Newsroom with more. This sounds like good news. Fill us


in. Well, this is because a lot of us get our broadband and our phone


lines and things like that as a bundle and those of us who do, which


is most of us, get a good deal because there is a lot of


competition in the market, but a substantial minority of people still


buy just a land line or they get things separately so they'll have a


land line contract and a broadband contract and what Ofcom are saying


is those people get a pretty rough deal. Whereas prices have fallen for


other people, for anybody who is just buying a land line contract,


the price of the contract in real terms, so stripping out inflation


has gone up between 25% and 40% over the last six years. Now that doesn't


sound great, but what's worse according to Ofcom is these are some


of the most vulnerable people, elderly people who may never have


changed their phone contract. This was what Sharon White the Chief


Executive of Ofcom had to say a short while ago. Our concern is


there are about two million elderly and vulnerable people, most of whom


have been with BT for decades, have never switched their telephone


provider, and they have seen their bills rise by about a third while at


the same time, BT's costs have fallen by a quarter.


So that was the Chief Executive of Ofcom. Now, what they're planning to


do there, is a consultation, but they say they want to reduce the


monthly price of a land line by about ?5. It doesn't sound a lot,


but ?60 a year if you're on a fixed income as many elderly people are,


that can have a big impact. This is a consultation. It will carry on to


May. Ofcom will take a final decision around the end of the year.


Thank you. We have got a story about the


triple-lock. It is about the pension triple-lock where the state pension


increases either by inflation, or wage increases or 2.5%, whichever is


higher. It was introduced in 2010 and it is something that's very


expensive and there is chat about scrapping it, but a former Pensions


Minister said scrapping it would be a bad idea.


Our top story, South Korean prosecutors have confirmed


they will charge this man Jay Y Lee, the third generation


leader of Samsung, with bribery and embezzlement.


He's been accused of giving donations in exchange


The lycra clad cyclist is a familiar sight in many


But not everyone looks great exerting themselves


In fact the British have an acronym for it.


MAMIL, meaning Middle Aged Men in Lycra.


A sight often seen on a Sunday morning.


But our next guest aims to make things a bit


more comfortable - and stylish -


He's Nick Hussey, the boss of cycling clothing company Vulpine.


It was launched in 2012 and aims to provide clothing that


doesn't look like you've just cycled to work in it.


raising more than ?1 million, about $1.25 million


in a crowd-funding drive in 2015 - around double the target.


It's a purely online operation with most


of its sales here in the UK - but the company plans to crack


Where did this come from. I am assuming you were a committed


cyclist? I was a racing cyclist in the 80 and I have seen cycling turn


into something completely different. What hasn't kept up is cycling


clothing. You think of tight, bright, smelly Lycra and that's what


MA MI Ls wear. I also work and I go about my daily life and there is


nothing I can wear for that, so I created the company to use


performance fabrics that look stylish. You can ride in it, feel


good in it, you don't have to carry a rucksack and go to the gym and


have a shower and wet wipe yourself down. Everything you've got on,


you've got bits and bobs, some of the gear that you sell. Just explain


if you pull those out Nick so the viewer can have a look, just explain


the science behind this fabric because you're saying you do still


sweat when you cycle... We all do. It doesn't smell and it doesn't


affect the clothes. You wore your clothes for weeks on end. I wore


wool and it didn't smell. How does it work? Is it the bacteria? It is a


naturally antibacterial fabric. It is pure wool. It is expensive stuff,


but it lasts extremely well and it performs wonderfully well so you can


wear it will all day and not be paranoid. It is expensive. The


jacket is ?300 compared to a cycling jacket for ?50. Why would somebody


pay that much more? Because they pay for quality and they pay for that


performance, that long lasting thing that they will have for years and


years and they can use it for their entire life. They can wear it for


years for everything they're doing in their lives. 68% of your sales


are in the k, but you have got overseas sales and you're looking to


increase those. How are those overseas sales come about. Have you


been targeting them? All we have done is concentrate on the UK and


put our resources in there. We are a small company and now, today, we're


launching a new range and we are starting to talk to international


markets. 32% of that international revenue has just come organically


and that's promising. That comes from Germany, the US, South Korea,


Japan, Finland, strangely, and we're not trying. So now we're going to


try and we expect that to expand quickly. How are you going to manage


that. Your turnover is more than ?1 million. You raised quickly on a


crowdfunding website the money you required. You're just ten people and


yet it seems to be snowballing. You and your wife are running this.


You're both working full-time. You have got a four-year-old and a


one-year-old, how are you going to pull all this off? It sounds


stressful. A lot of coffee and support. I have a great group of


staff who are very committed and also great shareholders, we have 600


shareholders now who are easy manage and extremely helpful. They are also


our customers, that's an important aspect of crowdfunding and really


our biggest problem is not having stock. We need cash for stock.


Interestingly, something that's maybe relevant to you guys is HSBC


fund our invoices which means that we can afford to buy more stock. All


right. We'll keep an eye on it. You don't look like many of our


coalition who come in in their sweaty Lycra to the BBC!


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You have been getting in touch about Samsung. We asked you is what


unfolding at Samsung affecting your shopping habits. A viewer says, "I


think quality and innovation of their products matter most other


than a corporate scandal." Ray, "I'm likely to avoid a product if I don't


agree with the company and its leader's politics." So mixed


opinions out there by Samsung. Dominic requested he would like to


do SpaceX, is that because you've got a ticket? No, I haven't got a


ticket. I'm fascinated by it. It is interesting the idea that a private


company would take people to the moon. This is Elon Musk, SpaceX, he


is not planning planning land anybody on the moon. It is a private


company that's doing this. You would think it would put people off? If


you go on YouTube you can see spectacular explosions with SpaceX


rockets that exploded. This is with Nasa's approval? The US Government's


policy has to get away from Government control of the space


programme and really subcontract subcontract it to private companies.


The consumers products that Silicon Valley pioneered are funding the


next phase of space exploration. Do you think they have travel


insurance? I'd like to know what the product is! There was another


article in the Times today about Mighty the caretaking outsourcing


company. There has been a lot of talk about getting workers on to


boards. Theresa May, the Prime Minister, before she was made Prime


Minister talked about worker representation on boards, but she


walked away from that. That's not going to happen. Mighty are going to


go ahead and do it. We will keep an eye on it. Do you think they will


get much input or will they be there? It depends on who will be


representing the workers. I will see you tomorrow for


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