09/03/2017 BBC Business Live


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This is Business Live from BBC News with Sally Bundock and Alice Baxter.


It's called the Trial of the Century in South Korea


and it kicked off today - Jae Y Lee pleads not guilty


to corruption charges including bribery and embezzlement.


Live from London, that's our top story on Thursday, 9th of March.


With a verdict expected in as little as three months' time, we'll ask


what the fate of the boss tells us about South Korea's biggest company.


Prices in China's factories rocket the most since


Could the world's factory be making inflation for the rest of us?


We will be keeping a close eye on the markets. Markets in Europe also


seeing opening slightly down. Is it child's play or an incredible


business idea? The former publisher who opened the door to magical toys.


And the former UK Chancellor, George Osborne, is to be paid almost


$800,000 a year for advising the US fund manager for just 48 days work.


the money. Do you think this is the money. Do you think this is


right? Get in touch. We start in the South


Korean capital, Seoul, where what's being called


the Trial of the Century has begun. The man in charge of the country's


biggest company, Samsung, has formally denied charges


of bribery and embezzlement in a scandal that has also seen


the president impeached. Samsung may be a household


name around the world, Jae Y Lee is vice-chairman


of the company, but he's known in the South Korean media


as the "crown prince of Samsung". That's because he's the only son


of the chairman, Lee Kun-Hee, who was once convicted of bribery


and tax evasion but later pardoned. Jae-Y has been in charge


since his father had That gives you a sense of the


background to the story. Geoffrey Cain is a journalist


who spent five years in Seoul and is now writing


a book about Samsung. He joins us from Arizona,


in the United States. We talk to you before when it was


unfolding. Today he is in court. If us a sense of how big a deal this is


for South Korea, Samson and for politics there. It is a very big


deal. This case is the trial of the century for South Korea. We have


never seen this happen before the eyes chairman is arrested before


being charged with a crime -- the vice-chairman. In the past, his


father has been convicted but he was never arrested and never actually


served any prison sentence. He was pardoned by a president. This is a


very unusual case. Will we see this case happening at the same time that


a sitting president is impeached, will we see the perfect storm


to a change in how business is done to a change in how business is done


in South Korea? I mean between it and politics? I do not think there


will be a fundamental change in the way politics and business are done


in South Korea. I think the general foundation will be in place, it is


something that has been in place for decades. The system goes back


through the history of South Korea's democracy, its authoritarian


governments in the past. However, we could see more transparency in


general. Broader changes that might push things in the right direction,


especially considering both of these cases are popping up at the same


time and the president herself, if she is found to be in this bad


situation, she may also face trial. In the meantime, for the company,


business as usual. The shares recently at record highs, profits


rolling in, products still selling despite the scandal and the Galaxy


7. That is the beauty of Samsung. It manages to get through all sorts of


hard times, smoking phones, problems with the leader, the WikiLeaks with


the CIA espionage against its smart TVs, one thing after another. It


seems that this company has such a strong system in place that can


weather all of it, they can keep making the products, the hard work


and that is the bottom line. Do we think Jae Y Lee might end up behind


bars or will he be pardoned like his dad? That depends on who becomes the


next president. It is hard to tell. I can definitely say many presidents


have taken office in South Korea and many have pledged to clean up the


system, stop the systems of presidential pardons, even the


current president who was undergoing her impeachment decision with the


constitutional court, she also pledged to clean up the system and


now she is the one in the dock for the giant scandal. I am doubtful


much will really change. We have lost you for a moment. He joined us


from Arizona. We spoke to him a couple of weeks ago. I was just


going to ask him what the time is there. He is great.


Interesting stuff. Lots of news about Samsung on our website as


well. Shares in Toshiba have closed down more than 7% in Tokyo. The


latest news comes after Reuters reported bankruptcy attorneys have


been hired. It has cost Toshiba $6.5 billion putting the company's future


at risk. Cab hire service Uber says it


will ban a secret software tool from being used


to evade undercover regulators. The software, called Greyball,


seeks to identify officials around the world trying to catch Uber


drivers operating illegally. The ride-hailing firm has been


using the tool to secure early access to cities


where its operations had not Reports from Vietnamese state media


suggest drinks giant Coca-Cola is planning to invest an additional


$285 million in the country. The beverage maker's decision


highlights its interest in the Vietnam market and may put


pressure on its competitors. With this investment, Coca-Cola's


total investment in the country Let us talk producer price inflation


in China. That's the prices of goods


as they leave the factory gate - it has been soaring at its fastest


rate in almost nine years. It's being fuelled by a jump


in the price of steel The official data has raised


the prospect that China may be about to export inflation


to the rest of the world, as the What more do you have for us on


this? As you mentioned, it was because of higher prices of steel


and other raw materials. If you take a look at the consumer price


inflation index, the prices of what consumers buy, it is cooled to the


slowest pace in over two years. Going in separate directions,


analysts are slightly puzzled about the strength of the broader economy.


Just over the weekend, Beijing has cut its growth target for this year


to 6.5%, the slowest growth, if confirmed, in nearly three decades.


Overall, it seems the higher production costs have not even


passed over to consumers just yet. Thank you. As we have just been


hearing, the big news out of China was that producer price inflation


accelerated to its fastest pace in nearly nine years, but consumer


inflation cooled more than expected. And that's had a huge downward


bearing on Asian markets. Energy firms also led a broad


sell-off on Thursday following a 5% plunge in oil prices, but the dollar


advance on the yen provided the region with one of its only


advances as Tokyo's Nikkei added 0.3% to end a four-day


losing streak. Meanwhile, here in Europe,ahead


of today's ECB meeting where the expectation


is that monetary policy markets here in London


markets particularly And Michelle Fleury has


the details about what's ahead They will be paying close attention


to the ECB meeting. Data on the number of Americans filing for


unemployment benefit is released this birthday. Most economists


looking for a rise of 4000 -- this Thursday. All of this comes ahead of


Friday's monthly jobs report, the last major piece of economic news


ahead of the US central bank policy meeting. Expectation is they will


raise rates. The tough retail environment is likely to have an


impact on results from office supplies company Staples. The


fourth-quarter results of June Thursday. Intense competition from


Walmart and Amazon most likely hurt sales -- results are coming on


Thursday. James, nice to see you. Loads of stories today. This we


should mention as well, change at the top at BT. A minor coming in.


Famously he was chairman of SAB Miller last year. A stalwart of the


city. BT will be very happy to have him as chairman. And Rio Tinto, he


has been on the board for a long time, he steps down later this year.


Change at the top, big change in career from mining to telecoms. Let


us talk about the UK budget, it came out yesterday, splashed across the


papers in the UK. The headline here has been the changes to national


insurance contributions, but broadly speaking, what did the Budget mean


for business? There is very little in terms of new policy. The


Chancellor decided to leave any major policies on business until the


autumn budget which he said will be the UK's main fiscal statement from


now on. Clearly the Office for Budget Responsibility which looks at


forecasts on behalf of the Government said the UK economy will


grow by 2% this year rather than the 1.4% it had predicted. Short-term


improvement. Also on the agenda, it has been mentioned already, European


Central Bank meeting. Everyone wants to keep quantitive easing going, is


that correct? That is right. They will be looking for any sense that


quantitive easing is tapering... It is money being pumped into the


market, helping the fund managers add-in for lighter. It has been


going on since the financial crisis -- ad infinitum. I remember the


tapering tantrum in the US. The same issue for central banks around the


world. We saw the 5% plunge in prices on Thursday, today a slight


stemming of that. Following Tom Ince from the Saudi Arabian oil minister,


the boss of BP was there, planning low oil prices for longer --


following comments. That is the territory we are in. James is


returning later. He will talk more about the Budget and what George


Osborne is up to, earning a pretty penny. Still to come... The inside


track on the Irish company trying to open the door for childhood trains.


Quite literally. We will explain that in a moment. You are with


Business Live on BBC News. First, here in the UK, lots of corporate


stories. The supermarket group Morrisons reporting a rise in annual


profits and sales. The Bradford -based group saw an 11.6% rise in


profits to some ?337 million for 2016 but it has warned of


uncertainties ahead. All of the details for us. Talk us through the


numbers. On the face of it, they were pretty good. Total revenue up


1.2%, reasonable performance. Like-for-like sales up one for 7%.


Underlying profits up a very strong 11.6%. Investors do not seem that


impressed this morning. Morrison share price is down nearly 5%. Maybe


they were expecting more or possibly the warnings of uncertainties ahead


coming to roost. What have Morrisons been doing to get into this


situation? They have been restructuring for the past two


years, closing some stores, particularly smaller ones, they have


sold a stake in the US retailer, the online retailer, they have reduced


debt quite a lot and they have been trying to attract more customers by


keeping prices down. They have partnerships with treble-macro and


Amazon. They are supplying products to Amazon -- with Ocado. This seems


to be reaping rewards. But there are uncertainties ahead.


They say more rocky times ahead, or not? Absolutely, the big one is the


pound sterling. It fell dramatically after the Euro referendum last year,


it hasn't really recovered. Importing produce from abroad then


becomes more expensive the supermarkets and the choices to


allow its air raid their profit margins or pass on the cost of the


consumers. This is a fiercely competitive sector. Aldi and Lidl


mounted a price war on the other supermarkets. It's a rocky road


ahead which the chief executive was talking about this morning. Thank


you. Morrisons with its rise in annual profits and sales.


On the website, more detail on the Budget. You can read more detail on


what the Chancellor and the Shadow Chancellor had to say.


You're watching Business live - our top story.


The de facto head of Samsung has formally pleaded not guilty to


corruption charges as his trial begins in South Korea.


A quick look at how markets are faring.


Markets are slightly lower at the moment, a lot is on the agenda today


including a central bank meeting at the European Central Bank announcing


their latest decision is midday today. Also a story that has just


been breaking coming from emirates, comments coming from them basically


saying that since Donald Trump's travel ban in January it had a


significant impact on the booking rates that they've seen for the


airline to the United States. No surprise to hear that. This is a


quote, the first US travel or the booking by some 35% overnight. Its


effect was instantaneous, that's the news coming from emirates. That


travel ban wasn't allowed to follow through because of legal blocking.


Now, many of you may have grown up believing there were fairies


Well our next guest has turned this fairy tale into a thriving business


moving the mystery visitors into the home.


The Irish Fairy Door Company does exactly "what is says on the tin" -


produces little fairy doors aimed at children from ages


According to the company, one in every two children in Ireland


From making the small wooden doors at the kitchen table,


the business has expanded and more than 150,000 doors have been


sold in 150 different countries worldwide.


Niamh Sherwin Barry, co-founder of The Irish Fairy


Wonderful to see you. And we could have some fairies in the studio! The


keys have all gone so they are somewhere in the studio. Welcome to


the programme. It is a fascinating idea and it's a very simple idea


that sounds like it has been extremely popular. Tell us how it


started. My friend and myself and our husbands got together. We had


seen a tiny door in America and we decided to bring it home to our


children and fairies moved in. That was 2008. The company started in


2013 so we three years in business now. Tell us about the idea. You get


the door and your child then believes the fairy has moved in. The


idea is you pick a name for your ferry and register with us on the


website. You leave the key out overnight. If the key has gone in


the morning the children know the fairy has arrived and it's going to


stay there for ever. It's all very magical land wonderful but the


cynical part of me wants to say I think you have to spend ?20 in order


to get one of these little wooden doors. Is it value for money? What


are we getting for that? A world of imagination. Technology is here, it


has its place but it's taken over. We want to bring the imagination


back. The way we used to play as kids. To actually sit down and usual


imagination. I could sit here all day explaining to you what happens


when a child gets one of these doors. Give one to a child and see


what happens. Their image nation is there for the taking, they aren't


using it enough. If a lovely concept but I'm imagining you pitching this


idea to investors. How did that go, how did you raise the money to get


this off the ground? Irish people are storytellers so we had a lot of


interest from home. We had been hit really badly by the recession so we


had no money to invest. My mum and my dad gave us the money, the


original start-up, 8500 year rose. She stopped is -- she had stopped


smoking and the money she saved she gave to us to stop the company. You


are selling in 150 countries around the world, you aren't really


established yet in the UK. We are getting there. We've been here for


about a year but we would be more in the small independent stores. There


are more levers up north. I think you're more cynical down this way.


What happens when your child realises it wasn't real? The way I


feel about it, it's very clear in my mind. Our keen unity of believers


would say the same thing. Imagination should be promoted, it


is part of childhood -- our keen unity. The benefits far outweighs


when they are ready to realise and move on. I think the benefit


outweighs the actual point. Do you have a fairy? Fairies are trained in


school to collect teeth so it's part of their duties! It's been


fascinating! My imagination is running wild.


In the UK - the Finance Minister, or Chancellor as he's known here,


Philip Hammond has defended his 2% hike on National Insurance


contributions, that's a form of tax that all employees have to pay that


go towards state benefits, insisting it will result


in the self-employed making a "fair contribution" to public services.


The Chancellor is coming under pressure from many


to rethink the tax change to 2.5 million


Speaking on the BBC's breakfast programme this morning


the Chancellor denied his critics that his tax policy


I don't accept that are all and we strongly support small businesses,


growing businesses, they are the bedrock of Britain's economy. We


will continue to encourage new ventures, innovation, growing


businesses in this economy. What we are dealing with here is a perverse


incentive in our tax and national insurance system which is driving


people who are essentially employees to turn themselves into


self-employed workers instead. That isn't good for them, it's not a


healthy thing for the structure of the economy to be driven by tax


advantages and tax differences. We've asked James to talk about his


paper's take on the Budget. I think there's a feeling that the


Chancellor has an wound manifesto pledges by David Cameron the former


Prime Minister. We aren't surprised to hear it are we? There has been a


change at the top but this is a government elected by the people in


2015. Although there's been a change in leadership and a changing


Chancellor, this is very much the same... This is very much the same


administration. Those pledges made in 2015... The reason for the anger


is the question, is this a fair closure of the gap between the


different the employed and self-employed pay in tax or is it an


attack on the risk-taking spirit out there? Our paper had the headline a


tax on enterprise. The Tory party supposed to stand up for people who


want to make money and better themselves. George Osborne earning


?650,000 for four days work a month. We asked viewers to get in touch


about this. We've had some input. Paul says, if you believe in


capitalism then George Osborne is allowed to earn what people are


willing to pay him. He is earning ?14,000 a day.


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