05/02/2018 BBC Business Live

This is Business Live from BBC News

with Ben Thompson and Sally Bundock.

The heir to Samsung, the world's

biggest smartphone maker,

Jay Y Lee walks free as South Korea

court suspends his jail

term for corruption.

Live from London, that's our top

story on Monday 5th February.

Jay Y Lee, is vice chairman

of Samsung but was convicted

in a sprawling corruption scandal

that also brought down the former

South Korean president.

South Korean president.

We will explain all you need to

know.

Also in the programme...

The world's biggest airline,

Ryanair, sees profits take off

but do consumers face the prospect

of higher fares for

their summer getaway?

And markets in Europe opening

like this, following the lead set

by Wall Street on Friday.

And we'll be getting

the inside track on marketing

the world-famous Kew Gardens.

Its commercial boss tells us how

the Gardens funds one of the largest

plant collections in the world.

Today we want to know

about your travel trials

as Ryanair profits take-off,

are you fretting about the prospect

of disrupted flights

over the summer hols?

Let us know, just use

the hashtag BBCBizLive.

Hello and welcome to Business Live.

The heir to Samsung, the world's

biggest smartphone maker,

walks free as South Korea

court suspends his jail

term for corruption.

The appeals court upheld

Jay Y Lee's bribery conviction

but cut his prison sentence

to a suspended term,

ordering his immediate release.

Lee, the vice chairman

of Samsung Electronics,

saw his sentence for charges

including bribery and embezzlement,

suspended so he does

not have to serve time.

Lee was convicted in connection

with the sprawling corruption

scandal that brought down former

South Korean president too.

Why is it so significant and that

action, which few people expect it?

In the last few minutes we have

received a statement from the

lawyers of Jay Y Lee. The lead

attorney has said to the BBC we

respect the core's decision in

finding the defendant not guilty on

the key indictments and we will do

our best to clear the charges. As I

was saying to you earlier, Jay Y Lee

has appealed this all the way and it

has gone all the way to the Supreme

Court. He insists he is not guilty.

To your point earlier as to how

significant this is, it is massively

significant. Up until today, the

idea Jay Y Lee would be able to walk

out, effectively freed from

detention, where he has been for the

last year was the least likely

outcome in terms of legal options we

were expecting to see during the

court case. Now, we have to make it

very clear, he was still found

guilty of bribery, but crucially the

differences it is alleged he made

bribes to get further control of

Samsung and the courts couldn't find

that to be true. They ruled they

couldn't find explicit evidence to

show that was the case. Already you

are seeing some impact on the share

price. We have seen Samsung shares

going up a bit. The fact he has been

in detention for the last year, the

long-term strategy was still a big

factor in the fact that he had been

behind bars for so long.

Briefly, it

is so interesting is the timing of

this, the spotlight being thrown on

these huge organisations in your

part of the world, there has been a

lot of pressure in trying to reform

them and make them more transparent,

where does this leave that process?

It raises so many questions over the

reform process. These massive family

run conglomerates, they are the

pillars of South Korea's economy and

be helped build the Korean economy.

But they wield massive influence and

are influential in the political

spheres. When the current president

was voted and he came in on the back

of these are election campaign

promises he was going to clean them

up. This particular case was being

seen as a litmus test for corporate

career. Many Koreans hoping for some

change may see this decision as

business as usual.

Interesting

stuff, but for now, thank you very

much.

The world's biggest airline

by passenger numbers, Ryanair,

has report its latest set

of financial results.

The company posted profits

of $132 million in the last

three months of 2017,

that's a 12% increase

on this time last year.

European airlines are still

grappling with overcapacity

in the market, but the bankruptcies

of Monarch, Air Berlin and Alitalia,

have already helped Ryanair to post

a 6% rise in passengers

numbers in January.

Tilmann Gabriel, Associate Professor

of Aviation Management

at City University of London

is with me.

Good to see you again. Quite

interesting results, better than

expected, Ryanair still doing well

and growing, but Michael O'Leary,

the boss, warning about a difficult

summer?

The Easter vacation, he has

many European bases and therefore

many European airlines and each

country has a pilot union. He's

based in Ireland and he has Brexit

as a big problem with the UK being

his main market. He doesn't have an

aircraft operating certificate in

the UK. These all threats to come.

What about the issue of having to

agree last month to work with the

British Airways pilots association

with regards to Ryanair pilot in

terms of discussions about pay and

holiday and all that type of thing?

He is saying today, some of the

demands from the unions at the

moment are laughable and he would

rather deal with strike action than

give in to the unions. It sounds

like he has got fighting talk?

He

might follow the example of

Lufthansa over the last two years,

they lost 100 million. They were due

to strikes. These are things he has

to take seriously to emotional lies

the discussion with laughable terms,

is not advisable. We have a very

strong support by Brussels and

labour laws for good social

conditions for the pilots. Remember,

we have a shortfall of pilots. He

has, at the moment, the issue,

Monarch, air Berlin and Alitalia had

problems all went down. So pilots

are there, but for the long term

with his growth, you will have two

be very conscious of the pilot issue

and get agreements going that will

help him.

We have also seen in this

statement this morning they are not

optimistic about average fares for

short-haul flights over the summer.

Potentially we could see fare rises,

we know there is pressure on

airlines at the moment but what

specifically for Ryanair is pushing

up that price?

The pressure at the

moment, few are going up slightly

but significantly, 30% is made up of

fuel. Labour costs, 45 million this

year as claimed by Michael Ola you.

He says 100 million next year. --

Michael O'Leary. He has an based --

embrace the problem is that he has a

good rapport with his palace. His

new CEO will help that and good

luck, I can say.

We will watch this

space. Thank you very much indeed.

Let's take a look at some of

the other stories making the news.

The UK's Civil Aviation Authority

is set to launch a review

into airlines' seating policies.

The investigation will examine

whether companies are deliberately

splitting up groups of passengers

to encourage them to

pay to sit together.

The CAA said it wanted to make sure

seat allocation practices

were "fair and transparent".

Britain's Lloyds Banking Group has

banned its customers from buying

Bitcoin on their credit cards,

following a sharp fall in the value

of the digital currency.

The ban, starting on Monday,

applies to Lloyds Bank,

Bank of Scotland, Halifax

and MBNA customers.

Shares in Asia winning back some

of the losses sparked

by a sell off on Wall Street.

Actually ended the session higher.

Also got a boost from a private

survey showing China's services

sector got off to a strong start

in 2018, expanding at its fastest

pace in almost six years.

It was interesting showing the

service data, China expanding at its

fastest pace.

Eruopean markets opening lower

though following that lead set

on Friday by wall street.

Expectations of a rate

rise in the US, earlier

than many had been expecting.

Investors have assumed

that there could be another two,

or maybe three rate rises this year.

Friday's jobs data adds

the option of a fourth.

We'll discuss what that

could mean in a moment,

but first Yogita has the details

about what's ahead

on Wall Street Today.

There's another budget

deadline looming, this week.

A situation that seems

all too familiar now.

The US Congress must

agree on a spending bill

by Thursday, to avoid one more

government shut down.

And, so, we're going to be seeing

some hectic negotiations take place

between Democrats and Republicans.

The new chair of the Federal

Reserve, Jerome Powell,

takes over, today.

Wall Street will be watching that.

But traders will also be looking

very closely at corporate America,

because it's yet another

big earnings week.

On Tuesday, we'll see General Motors

releasing results and social media

company Twitter as well,

which is expected to post a profit

for the first time ever.

Later in the week, Tesla,

Disney and Viacom will all be

reporting earnings.

Joining us is Simon Derrick,

Chief Markets Strategist,

Bank of New York Mellon.

Good morning. Pretty busy, lots of

earnings stories. Jerome Powell into

day and Brexit stuff here dominating

in the UK and Brussels as ever, but

it is a big week for Brexit?

When

you look at this week, there are so

many interaction, whether it is the

Bank of England, the Brexit

discussions or the new chairman of

the Federal Reserve, but the

backdrop is we have markets that are

starting to take a little bit of a

fright about the rise in interest

rates taking place in the US. This

is a story that has been building

since the start of the year and the

jobs data and this concern about

inflationary pressures in the US is

starting to spook the markets. Can

we get a recovery from here and

stabilise, or will we have another

rotten February. February is always

the worst month for the markets.

History tells us. A quick word on

rate rises. Will we get a next one

for the well's largest economy and

that changes the dynamics because

what happens in America affects the

rest of us, whether we like it or

not?

There is the discussion of

three, but also whether it will move

to four rate rises the share. That

will make pretty money on deposits,

US government debt more attractive

to equity markets. It is a tough

call when markets are already so

high and some people would say

overvalued.

February could be

telling. Simon will be back soon. We

have other stories to discuss with

him. Also...

Still to come:

Growing revenue.

We meet the woman who keeps

the money coming in to fund research

at The Royal Botanic Gardens at Kew.

You're with Business

Live from BBC News.

Downing Street has insisted Britain

will leave the customs

union after Brexit, amid claims

of Tory disunity over

the UK-EU future relationship

Joining us now is our business

correspondent, Jonty Bloom.

Tell us more...

Since Theresa May said last year we

were leaving the customs union, why

is this significant now?

Two

reasons, this week there will be

meetings of the Cabinet committee,

which is in charge of deciding what

the UK's policy on Brexit should be,

what the end result is likely to be.

That was still up in the air. There

was internal battles going on in the

Conservative Party last week with

the hard-line Brexiteers insisting

they wanted to be outside the

customs union. Number Ten was forced

to say that has been our plan all

along. Nothing has changed, there is

nothing to see here. Those internal

battles in the Conservative Party

forced those comments from Number

Ten.

In the meantime, Theresa May's

meeting with Michel Barnier today in

London is quite important. Remind us

what this statement comment come out

of Downing Street means?

The UK has determined it will leave

the single market, the whole of the

EU market, the free movement of

goods, people and capital.

We have

also confirmed we will leave the

customs union, the series of

external tariffs on agricultural

products and goods that arrive in

the EU and faces a common external

tariff. We will have our own

tariffs, we will be able to set our

own free trade agreement. But it

does leave open quite a few large

issues, how will we manage the

border between the EU and the UK in

Ireland? That is currently virtually

nonexistent, you would be lucky if

you could spot it. And how we will

deal with goods that are right in

the UK that are shipped on to the

EU, things that are made in the UK

and shipped to the EU, what happens

to them at the border?

Thanks.

Let's show you what is online. Tesco

has got a new boss.

Tesco is merging with the wholesaler

group, Booker and we are told that

its boss, Charles Wilson, will

become the new chief executive of

Tesco in the UK. The group executive

remains Dave Lewis, he will be Tesco

group CEO as he was before.

You're watching Business

Live, our top story:

The heir to Samsung, the world's

biggest smartphone maker, Jay Y.

Lee walks free as South Korea

court suspends his jail

term for corruption.

A quick look at how

markets are faring.

Not a great start to trading if you

don't like to see losses. This is

the story in Europe.

Heavy losses in Asia earlier today.

It might feel like it's been a long

cold winter, but spring

is just around the corner.

Certainly if you live in the

northern hemisphere.

And so it's a busy time

for our next guest -

from the world famous Kew Gardens.

It's home to one of the largest

and most diverse plant

collections in the world.

Kew is also a research centre,

which requires a lot funding.

The UK Government's environment

department, DEFRA, provides around

45% of Kew's income.

The rest needs to be self-generated.

The gardens' depends heavily

on the generosity of donors -

from private philanthropy,

the corporate sector and the public.

Visitors are essential, too.

With us is Sandra Botterell,

Director of Marketing &

Commercial Enterprise

at Kew Gardens.

Nice to see you.

Good morning.

We

talked about some of the funding and

we had a chat and you get even less

money from the government?

It's

about one third at the moment, that

means we have to generate two thirds

of our revenue ourselves.

Explain

for people who don't know how it

works where you get the majority.

As

you mentioned, a lot of it is

philanthropy and different types of

philanthropy, we have a successful

friends scheme, membership scheme.

Corporate philanthropy and

individual giving. But we have lots

of different ways that we raise

commercial revenue and that is

really important. It is increasingly

important as our public funding goes

down.

Funding is key. This is a

200-year-old site, it is pretty

huge. It's not just the fact that it

is beautiful gardens, you've got a

lot of scientists there as well who

do very important work. And it is a

UNESCO world Heritage site, which

puts shackles on your bit as to what

you can and can't do.

That is right,

it is a world Heritage site, which

is beautiful. Lots of old

infrastructure and beautiful

heritage buildings which we have to

maintain. We have a large capital

investment programme at the moment

to do that. In terms of commercial

revenue, you are right. We have as

many scientists as we have

horticulturalists. People don't

realise that is what the botanic

part of our name means, we either

working garden and they are working

to maintain those living and dry

collections. They do important

scientific work.

It costs about $30

to get in, about £20. When people

look at that, they might think it's

quite expensive. But we were just

talking about the cost of

maintaining an site. People no Kew

for those huge greenhouses and you

are renovating one of those and that

is pretty expensive.

The temperate

house, the world's largest surviving

Victorian glasshouse, we spent £40

million restoring that. That is

going to open again in May.

We have

pictures of the houses, those are

the things that some iconic and it

allows you to have all of these

amazing plants right there inside

London, plants that are only grown

in other parts of the world more

traditionally.

That is right, they

are the living collections, that is

what the public will see. Behind the

scenes, we had huge reserves dry

collections.

What do you do, in

terms of events? And attractions

that will bring tourists in? You

have got to keep yourself relevant,

compared to all the other things on

offer in London.

We do an awful lot,

we have a whole programme of

activities and events across the

year. Not everybody thinks that a

visit to Kew would be for them but

actually, there are activities for

everybody, whatever you're

interested in, whatever your age

group. We have the Orchid Festival

coming up in February. As you said

earlier, February is a bit gloomy.

It's a real highlight in the year,

exotic orchids. And then Easter, we

have a family festival. We opened

the temperate house in May, we have

a series of activities around the

temperate house. And we have

Christmas at Kew, that is fantastic

illuminated Trail.

You have to be

careful with knowing who you are. A

lot of people makes you up with the

Chelsea flower show.

The RHS. Yes. I

suppose we have Royal in our name.

We are different because we are a

botanic garden, a working garden

with those crucial collections and

the scientific work that goes on

behind the scenes. It really helps

further our understanding of why

plants matter to our lives in a

whole range of ways.

Lovely to see

you, thank you for coming in. We

could talk much more but time is

against us.

Thank you.

Now, we know the battle

for driverless cars is hotting up -

and in Silicon Valley a court case

between two huge names

in the business could have big

implications for the future

of the sector.

Our North America technology

reporter Dave Lee

explains what's at stake.

Waymo is the self driving car

company spun out of Google.

They're suing Uber,

claiming that company

stole their trade secrets

and used them to help them

build a self-driving car.

Uber denies this.

It all centres around a man called

Anthony Levandowski.

He used to work for

Google but then he

left, taking with him,

it's alleged, 14,000 confidential

documents relating to the design

of Lider, that's the technology that

allows self-driving cars to see

where they're coming.

allows self-driving cars to see

where they're going.

He then set up his own

company that was later

acquired by Uber.

Waymo says this is all a front

for simply stealing

Google's technology.

But Uber's defence is

this: so what if the

documents were stolen?

That doesn't mean

that they were used.

And that is what Waymo has to prove.

Simon is back with us. February is

gloomy but there's another story.

It's the best I can do for you on a

Monday morning. The US government

deficit, the amount of money they

borrow every year is going up. The

talk is that it's going to double

and they may end up borrowing close

to $1 trillion. That's an

astonishing amount. Of course,

people are wondering quite what's

going to happen when we talk about

the infrastructure spending.

Is this

to fund that infrastructure? Or is

it to fund pre-existing commitments?

Pre-existing commitments. We haven't

talked about where the money will

come from to fund the infrastructure

stuff. The reason it is going up is

because of the tax cuts. For the

moment, there is no evidence that

there's going to be funding from

growth. People will forecast this

sharp rise. They were talking about

a 2 trillion deficit.

Why should we

care?

Because if we talk about the

US command borrowing more money,

there will be people out there

saying, if they borrow this much,

that raises questions about

creditworthiness. Maybe we need to

charge a higher rate. Interest rates

go up. When we already worry about

inflation, you're pushing rates

higher and higher, that makes it far

more concerning for equity markets

because people will think I can get

a better rate simply putting my

money on deposit.

Or Bitcoin? Did I

say that? No! Wall Street Journal,

Apple music on track to take over

Spotify in US subscribers. There has

been a real race between the two but

it seems that Apple has the edge.

You can understand that, Apple has

the operating system and the

hardware. The whole world of music

has gone round in almost a full

circle. Nowadays, we got rid of CDs,

we got rid of downloads to a large

degree, we have Spotify and Apple

Music, the world's best radio and

people buy vinyl, like the 70s.

Do

you stream music?

No, I have vinyl.

I am that old-fashioned.

You can't

do that in your car.

You just need

to keep your hand on it and it's

fine.

Drive really slowly! When you

get your driverless car you can ship

your vinyl around. What about you?

Streaming. I have kept certain key

CDs, growing up. But the rest will

be... You have the option of

whatever mood you are in, you search

for it, there it is.

I have been

given instructions to clear the loft

of all CDs.

Before you go, this

week, your seat belts fastened? Or

are you calm going into a new week?

This will prove to be bumpy but I

don't think it's going to be the

big, big correction.

Good. There you

go, ending on a bright note. Even

though it is February five.

That's it from Business Live today.

Have a great day. Goodbye.