25/08/2017 BBC Business Live


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This is Business Live from BBC News with Ben Bland and Jamie Robertson.


The de facto boss of the South Korean giant faces five


years in jail for crimes ranging from bribery to perjury.


Live from London, that's our top story on Friday the 25th of August.


As a court in South Korea finds Samsung heir Jay Y Lee


guilty of paying bribes, we ask what it means


Plus, the flying kangaroo bounces ahead of its rivals.


Qantas has posted blockbuster results today, despite


This is how the European markets look at the start of the trading


day, investors around the world will look to the meeting of the world's


Central bank happening in Wyoming. Slowing demand for the latest


smartphones. Our own technological Guru Rory Cellan-Jones will be with


us. It's announced self driving lorries will be tested on UK roads,


so we ask if you would be happy driving next to a 44 tonne


driverless juggernaut. Use the hashtag to get in touch.


Some tweets coming in, one viewer says it's terrifying but exciting,


the thought of driving next to a driverless truck.


A court in South Korea has found the heir to the Samsung


empire guilty of bribery, embezzlement and perjury.


Jay Y Lee, the de facto head of the $300 billion


business empire - and grandson of the founder -


has been sentenced to five years in jail.


It started with this - $36 million donated by Samsung


to organisations linked to former South Korean president


She was removed from office and is also facing corruption charges.


Back in 2015 the Samsung conglomerate was undergoing


restructuring, with a controversial merger of two of its businesses.


Prosecutors argued the aim was to boost Mr Lee's personal


power over the company, which he's been running since his


The deal needed shareholder backing from the national pension fund,


which is run by the South Korean Government.


Prosecutors argued the donations were bribes to win


The affair has once again raised concerns


about South Korea's business culture - and the huge family-owned


They've long been seen as too cosily linked to government -


and not sufficiently transparent in their dealings.


To give you an idea - sales by Samsung companies account


for around a fifth of South Korea's entire economy.


Our business reporter Yogita Limaye is outside the courthouse in seoul


All these pieces linked together by the prosecutors and the judge


believed there was a proper link between the payment of this money


right the way through to basically corruption at government level?


That's right. What the court has said is that this money was paid to


get President Park, the former president of South Korea's support


for the merger of the two Samsung companies to pave the way for Mr Lee


to eventually become boss of the firm. The court found him guilty


also of embezzlement, perjury and hiding assets over seas. The


five-year sentence is significant. This is not the first time the boss


of a big conglomerate has been found guilty or convicted, but in the past


the sentences have been suspended or they have presidential pardons. Mr


Lee's lawyers have already said they will appeal, but if he does end up


spending a significant amount of time in jail, that will be a


departure from what we have seen here in the past. The new president


who won elections after the former president was impeached over this


entire corruption scandal, the new president has said there will be no


more presidential pardons and they want big conglomerate 's ear to


clean up. If we see Mr Lee Knauss is now spending a large amount of time


in jail, it gives a message for other businesses to clean themselves


up. How significant is this for South Korean business culture?


Firstly, think about what the Samsung group means for this


country. It would be hard to find a person in the country who has not


used a Samsung product or service. They are not just smartphone makers


in the country, they are into construction, shipbuilding,


insurance. There are Samsung hospitals and universities and even


a Samsung amusement park. They account for a fifth of the economy


here. Speaking to people about what they think about the trial, I have


seen a distinction between what the younger people think and older


people. Younger people are anti-corruption and want to see


justice done, whoever it is. A lot of older people remember Samsung and


big conglomerate seer as being the companies that pulled the country


out of poverty after the Korean War in the 1950s and into a good


economic place. That's way they say there should not be a severe


sentence. Outside the court we have seen protests both ways, people


protesting against corruption, and also people who are pro the former


president and therefore pro-Samsung. A bit of breaking news. The British


Foreign Minister Boris Johnson has told the BBC that he thinks some of


the sums for Brexit seem to be very high indeed. In his words, he says


we should not pay a penny more or a penny less than we think our legal


obligations amount to in the Brexit built talks. That was the British


Foreign Secretary on his thoughts on the British exit will. The


government will be publishing its position papers as it entered the


next stage of negotiations. Let's take a look at some


of the other stories Music streaming service Spotify has


signed a new licensing deal with Warner Music Group -


paving the way for After deals with Sony and Universal,


Warner was the last of the three big record labels to agree to renewed


terms to make its catalogue available to Spotify's


140 million users. Investors have been selling off


shares of supermarkets in the US after Amazon said it


would complete its takeover The e-commerce giant plans


to sell Whole Foods brand products on its website,


integrate its systems to offer Prime members discounts and provide Amazon


pick-up spots at Whole Foods stores. Walmart, Target and Costco


all saw their shares fall. Small convoys of partially


driverless lorries will be tried out on major British roads by the end


of next year, the government A contract has been awarded


to the Transport Research Laboratory to carry out the tests


of vehicle "platoons". Up to three lorries will travel


in formation, with acceleration and braking controlled


by the lead vehicle. We have been asking you for your


thoughts about that. Steve has said he prefers the idea of driverless


lorries than me sometimes swerving human version. Let us know if you


agree with Steve or if you take the opposite view. They call it elephant


racing when the two trucks are racing each other. As you not heard


that expression? Elephant racing up the motorway.


Australian airline Qantas has posted its second best


annual profit ever - despite fierce competition from its rivals.


Boss Alan Joyce is calling it a vindication of his three


year turnaround plan - which has involved


Christine Hart is in Singapore for us. Three years of pain for some,


but apparently it has paid off. It's paid off in a very spectacular way.


Pre-tax profits at just over 1.1 billion, the second highest profit


the airline has seen in its entire 97 year history. That's saying quite


a bit. They also on Jet Star. Qantas credits those result to effective


cost-cutting measures and a very robust domestic travel market. Its


loyalty business has seen very strong growth. Going forward,


improving the customer experience, we talk about Wi-Fi, better Wi-Fi,


lounges and services, all those offerings will be more important in


its strategy. It will also expand offerings for trips. It will have


Perth to London direct next year. It will also be working on Sydney to


London by 2022. For now, Alan Joyce has said the turnaround is complete


and that's what we have to go on. Thank you, Christine. Let's take a


look at how the markets are doing. Asian stocks advanced on Friday.


Once again shrugging off a sluggish day on Wall Street. Tokyo stocks


rising, as Tokyo and Honda chalked up games with investors focusing on


the key meeting of the world's top central bankers gathering in


Wyoming. We can flip the boards to show you the European markets.


That's how they start the trading day, all in positive territory. We


can take a look ahead to what we might expect from the Wyoming


meeting in Jackson Hole. And Michelle Fleury has


the details about what's ahead Investors' attention this


Friday will be on a small resort town in Wyoming -


not for the fly fishing, but for the annual gathering


of central bankers from around US Federal Reserve chair


Janet Yellen speaks in the morning. Mario Draghi, the head


of the European Central Bank, In the past, this meeting has been


used to make big announcements - not this time, according


to many market watchers. Well, because even though the US


and Europe are stepping back from the stimulus measures


introduced after the financial crisis, Ms Yellen and Mr Draghi have


good reasons to keep their cards With Janet Yellen's future


at the Federal Reserve uncertain, few expect her to make


any ground-breaking statements. And even though Mario Draghi's


speech is seen as perhaps more significant this time,


he may choose to play it safe. The markets got excited


after a recent speech he gave at another central bank conference


in Portugal, and he was forced On the economic front,


watch out for the latest durable goods orders,


that's due to be released Joining us is Nandini Ramakrishnan,


global market strategist at Good to see you as always. Plenty to


talk about. All eyes on the world's Central bankers and whether we will


get hints from any of them about balance sheets tapering and moves on


interest rates. The big ones to watch our Janet Yellen and Mario


Draghi. Both central banks doing a lot with their policy this year.


Janet Yellen of the Federal reserve, will they reduce the amount of


assets they have lost tonight all the bonds they have been buying in


the last few years, all stuck in a vault somewhere. That's how I like


to think of it. It's been ten years since the crisis, starting to reduce


that will have an effect on the market, specifically longer term


government bonds in the US. They suggested that they would do it so


slowly and other such a long period of time, some of the bonds will


mature and disappear anyway so we will not even notice. That's a bit


of an overstatement and I think we will notice in the market. We will


see yields and interest rates over the longer ten or 30 year bonds will


go up because there is less demand from the big buyer, the Federal


reserve, buying them up over the last ten years. All the idea of


long-term and short-term interest rates starting to rise over the next


couple of years. Ticking up slowly. Different dynamics will be reflected


in the yield curve and it will move differently across the world. On the


mind of Mario Draghi as president of the European Central Bank, if he


starts to raise interest rates for the Eurozone, we could see the euro


strengthened and that could be a problem for the European exporters.


For the ECB, compare to the US Fed, they are behind. They are not


reducing the amount of assets, they are thinking about reducing the


amount day at every month. The euro has been one of the strongest


performing currencies over the course of the year and it could


affect big exporting nations like Germany who have a lot of revenues


coming from abroad. Watching that currency will be very important.


Stick around, we will talk to you about the papers later in the


programme. Still to come, this


week's digital takeaway. Technology correspondent


Rory Cellan-Jones will chart a path through all the big tech stories


of the week, including the news that Estonia is looking


at launching its own You're with Business


Live from BBC News. Now, big brands influence


what we buy through clever advertising on billboards,


TV and social media. But in an increasingly


crowded world, how are they going to connect


with consumers in the future? Let's talk more with our business


correspondent Ben Thompson. He's at a 2,000 square feet


showroom called The Home Where is it? Here is by the fridge


at the back! Here is getting a beer! Increasingly backed fridge this


morning, as well as the media market, in which all of this works.


We are at the house of the future, and if you think it is dark, this is


all wired up, so let me try this. Kitchen lights on. And there we go,


the lights come on. So this is just one example of a wired home, and all


of the stuff in this place is pretty hi-tech, so your TV can speak to


your fridge, it knows what is in the fridge, because it has got a camera,


and it will know from your online deliveries when it is due to go off.


It will suggest recipes, it will even turn on the oven to tell you


when to put it in, and when to take it out, crucially. Just some of the


examples of things you can do in a wired home. Simon, good morning, you


are a futurist here, you have been showing me all sorts of things, this


looks a little bit more day to day, rather than some of the high tech


stuff. Shall we by a chair in augmented reality? We will select


this wicker chair, and with millimetre accuracy, it is now going


to PA on the floor, OK? I can adjust the position, rotated, then I take a


photo, click, share that photograph on my social networks and ask my


friends whether I should buy it or not. Really interesting stuff, the


technology is an increasingly big part of our lives, and it is


changing the way that brands sell to us. Traditionally they would have


used billboards, radio and television, but now they know we


bought a shirt last week and you will need a pair of trousers to go


with it this week. More from me later.


Just a quick look at the Business Live page. Business is not able to


invest in staff because of increased costs.


You're watching Business Live, our top story:


A court in South Korea has sentenced the de facto boss of the technology


giant Samsung to five years in prison after finding him guilty


of paying bribes in hopes of obtaining government favours.


A quick look at how the markets are faring, these are the numbers, a


little bit mixed. The pound against the dollar, that is falling a little


bit, just below 1.28. We are slightly on the way down, but also


down against a strong euro, which is not on the screen at the moment.


It's been yet another busy week in the technology world.


Samsung is once again making headlines with the jailing


Britain's largest retailer of smartphones,


retailer Dixons Carphone, is blaming consumers' reluctance


to upgrade for an unexpected profit warning.


Meanwhile, the country Estonia wants to launch its own government-backed


Joining us now is our technology correspondent Rory Cellan-Jones.


Rory, good to see you, so which one shall we start with, Samsung? The


company seems to be doing OK despite all of this? I was writing this week


about the launch of its new giant phone, this time last year we were


reporting on the Galaxy note 7 exploding, a terrible product


recall, complete disaster, then we had the news of the bass being


arrested, we have seen what happened at there, so you would have thought


a terrible year. But no such story, really, it has gone from strength to


strength, record profits, it made more profits in the quarter than


Apple recently, which is quite some achievement. Its share prices


hitting record highs. It is showing a steely determination to just carry


on. It could have abandoned this Note phone altogether, it abandoned


the Note 7, it could have retired the brand, but they have loyal


customers who have come back, and all the signs are that this new


phone will be a success. So yet again, it is Samsung versus Apple,


we are back to where we were, two very strong companies battling it


out. I'm fascinated about the Estonian crypto currency, I know


this is terribly prejudice, but it doesn't fill me with confidence, the


idea of an Estonian crypto currency. Estonia is an extraordinary little


nation that has prided itself on being very advanced in all things


digital, it runs its governor and very largely online, all sorts of


services online, and it has got this initiative called e-residency. I am


an Estonian e-resident. I have got the right to start a business


remotely in Estonia. Did it cost anything? It cost 100 euros. It


gives you the right to start a business remotely in Estonia, and


they see it as a way of a small nation, little over a million


residents, it gives it great power, they think, to advance their digital


cause. And they put out a blog saying that the growth of


e-residence is higher than their birth rate, and they are thinking of


launching their own crypto currency. They float lots of ideas, but this


is very interesting, it would be called Estcoin, it would be


available to e-residence as a way of trading with all the security that a


crypto currency theoretically offers. -- e-residents. But surely


there is a contradiction, because crypto currencies do not have


borders, no central bank, nothing to do with nations. Exactly, I have


been interviewing the guy behind the scheme, and he is admitting that


coming says it is time for somebody to float this idea, because central


banks are going to have to get their head around the fact that people


will be using these currencies, they may be using them to avoid tax, so


better that we start to bring the idea within the realm of government.


And another story that was really interesting is phone upgrades,


people becoming a little bit more frugal, holding off upgrading just


for a while, causing problems. Yeah, we heard this from Dixons Carphone


this week, big profits warning, based solely on the fact that it has


got a theory, it thinks people are holding off renewing their phones


after two and a half years rather than two, and that six months has


put a huge hole in their prospective profits. And I have got a theory as


to why this is happening - two fantastic modern smartphones, they


look just about identical, you probably couldn't tell which is


which, and they are all incredibly capable, all incredibly expensive,


pushing $1000, ?900 these days, and that is looking very expensive to


people. And people are beginning to think, my current phone is great,


what is this new one going to give me that is so different? They are


altering off the upgrade decision. Thanks very much, really good to get


your thoughts on all of that. You can come again! The phones didn't


ring either, so even more welcome expect


In a moment, we'll take a look through the business pages,


but first here's a quick reminder of how to get in touch with us.


The Business Live page is where you can stay ahead


with all the breaking businesses of the day keep up to date


with the latest details with insight and analysis from the BBC's team


get involved on our web page, and on Twitter,


Business Live, on TV and online, whenever you need to know.


Nandini Ramakrishnan is joining us again.


We are going to be looking at the newspapers, one particular story I


want to concentrate on any financial times, oil prices. It is quite


confusing, all influenced by hurricane. Usually when these risks


come to oil producing countries, the price spikes, because we do not know


if we will get the ground, but what is tricky about this one is that 45%


of US refineries are in the area that is potentially going to be hit,


and they are different from producers. When you have not got the


refinery functioning, the oil producers cannot sell their oil to


get refined, and that is causing the price to go down, rather than up.


But it does change, I have seen that headline, but also this headline


from the Financial Times saying that prices are going to rise. At the


moment, the other thing about Hurricane Harvey is that they did


not get warned about it until quite late in the day. More importantly,


that is tricky, but for market it is hard to price this, the refinery


versus produce a fact, as well as the lack of warning. It highlights


the changing influence that groups like Opec have, but sometimes it is


far? Events. Yes, far beyond their control, and when you think how


important oil prices are, affecting inflation and emerging markets, a


lot can be paid off a global move like this.


There will be more business news throughout the day on


the BBC Live web page and on World Business Report.


From us, have a wonderful weekend, we'll see you again soon, bye-bye.


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