12/01/2017 World Business Report


12/01/2017

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From boardroom chief to commander in chief.

:00:00.:00:17.

Trump hands control of his business empire to his sons.

:00:18.:00:22.

But ethical questions will remain for America's

:00:23.:00:23.

Plus - "I apologize to the South Korean people".

:00:24.:00:32.

Samsung boss Jay Y Lee is questioned in a growing corruption scandal

:00:33.:00:38.

I'm Sally Bundock - we'll be live in Seoul in a moment

:00:39.:00:46.

we are in the US where, as you've been hearing,

:00:47.:00:54.

President-elect Donald Trump has been dismissing claims Russia holds

:00:55.:00:58.

compromising material on him, calling it "fake news".

:00:59.:01:00.

The row has even threatened to overshadow controversy over

:01:01.:01:03.

Mr Trump's business dealings and concerns he will face a major

:01:04.:01:07.

conflict of interest once in the White House.

:01:08.:01:09.

On Wednesday he said he'd hold onto his business empire but hand

:01:10.:01:13.

"complete control" to his two eldest sons, Donald Junior and Eric.

:01:14.:01:16.

So will it be enough to silence the critics?

:01:17.:01:19.

The Trump Organisation is not listed on the stock market so it doesn't

:01:20.:01:24.

But according to private company research firm Privco the real

:01:25.:01:33.

estate, hotel and leisure empire made revenues of $9.5

:01:34.:01:36.

According to Bloomberg - as well as billions in assets,

:01:37.:01:44.

the organisation has some $600 million of debt,

:01:45.:01:46.

owed to scores of financial institutions.

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Another potential source of conflict.

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It employs an estimated 22,000 people in more than 20 countries,

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raising questions over foreign policy But Mr Trump's lawyer says

:01:57.:02:04.

"no new foreign deals will be made whatsoever" while he is president.

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She says over 30 pending deals have been cancelled,

:02:08.:02:10.

instantly losing the family millions of dollars.

:02:11.:02:15.

And an ethics advisor will be appointed to approve all dealings

:02:16.:02:21.

that might raise conflict of interest concerns or be seen

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to exploit the office of the presidency.

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In order to address issues of conflict of interest the

:02:27.:02:41.

President-elect is said he will establish a trust and will turn over

:02:42.:02:44.

management of his organisation to that trust. The trust will be run by

:02:45.:02:51.

his two sons and a trusted adviser. The President-elect has also said

:02:52.:02:55.

there will not be any new international deals made by the

:02:56.:02:58.

Trump organisation while he is in office and any new domestic deals

:02:59.:03:04.

will be subject to the approval of a self appointed as its adviser that

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will be also part of this trust. Have a listen to a little bit of

:03:10.:03:15.

what the President-elect said in a press conference about his business

:03:16.:03:19.

interests. My two sons who are right here, Don and Eric, are going to be

:03:20.:03:26.

running the company. They are going to be running it in a very

:03:27.:03:31.

professional manner. They're not gonna discuss it with me. Again, I

:03:32.:03:35.

don't have to do this. They're not gonna disgusted with me. The

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question is whether this will be enough to silence its critics. And

:03:40.:03:45.

the early indication is that it probably won't. The biggest problem,

:03:46.:03:49.

of course, being that Mr Trump has not fully divest it and many people

:03:50.:03:54.

believe that in order for this to really work, the President-elect

:03:55.:03:57.

would actually have to sell any of his business interests. Further,

:03:58.:04:02.

establishing a trust with his two sons at the helm doesn't really give

:04:03.:04:08.

enough distance between the highest office in the land and the Trump

:04:09.:04:14.

organisation. So many questions remain. I am joined by Stephanie. Is

:04:15.:04:24.

this enough? It does not even come close to being enough and he knows

:04:25.:04:29.

this. Congress knows this and the press knows this. So what will be

:04:30.:04:33.

interesting will be how will we hold him to account on this? Every other

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president in modern history has put their assets into a blind trust. It

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is completely fair to say that that is difficult in this case because

:04:44.:04:47.

his empire is so massive. It is about real estate as opposed to just

:04:48.:04:51.

shares. So we are in uncharted territory with the kind of assets

:04:52.:04:55.

that he has. But the idea that this is going to be transferred to his

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children and that guarantees a sense of neutrality for him is proposed

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is. You can imagine the family discussions over dinner. But the

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independent ethics adviser, whoever he or she will be, will that be held

:05:10.:05:14.

full or is that just tokenism? Exactly. What power will this person

:05:15.:05:22.

have caught? If the President-elect is the boss for this person, they

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can make advice or comments but that is the question here and this is the

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detail we are lacking. The other issue of course, there was a lack of

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detail in the press conference about anything else and market around the

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world are reacting in different ways. The dollar has fallen quite a

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lot over the last couple of days. We have seen shares falling in Japan.

:05:43.:05:47.

There is concern that he is still not saying much about his policies

:05:48.:05:50.

are for businesses in and outside the US it is difficult for them to

:05:51.:05:54.

know what his presidency will mean. There is one thing I think has

:05:55.:05:58.

become abundantly clear and that will continue well before his

:05:59.:06:02.

inauguration which is this desire to seek jobs kept in the United States.

:06:03.:06:07.

Any plans that any specifically American companies had to take jobs

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outside will be criticised. We have already seen him happily and

:06:13.:06:16.

deliberately use his Twitter account to criticise companies whose share

:06:17.:06:19.

prices have been collapsed. Every board and the United States is going

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to be factoring that into their risk management strategy. They do very

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much for coming and. We will see you again soon.

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We are also in South Korea where technology giant Samsung has

:06:31.:06:33.

been battling to rebuild its reputation after its top

:06:34.:06:35.

of the range phone had to be withdrawn following a spate

:06:36.:06:38.

In the last few hours, a new setback for the firm,

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as boss Jay Y Lee was called in for questioning in a widening

:06:43.:06:46.

corruption investigation that has already seen the president

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Mr Lee is seen as the heir apparent of the firm,

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which he has been running since his father Lee Kun-Hee had

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Investigators want to know if the company gave millions

:06:57.:07:00.

of dollars to a friend of the South Korean president

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Let's talk to the BBC's Stephen Evans in Seoul.

:07:06.:07:13.

We have heard a lot of apology but nobody admitting to wrong doing so

:07:14.:07:25.

far. Is that correct? Yes. It's one of those... Connoisseurs of

:07:26.:07:28.

apologies will relish this case. It is one of the cases where somebody

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is saying sorry but I am innocent. The apology today was I am very,

:07:33.:07:37.

very sorry for creating a bad image. The President's apology was for

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trusting, I am very sorry but I trusted people too much. So

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apologies, yes... Admissions of guilt, absolutely not. These remain

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allegations which are being investigated. Very serious

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allegations because a lot of outside shareholders from Samsung, people

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who have shares in Samsung but who are outside the family as saying

:08:06.:08:09.

this merger of two companies back in 2015 within Samsung was basically so

:08:10.:08:13.

the family could tighten its control of the company and was not actually

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to the benefit of shareholders in general. So if the pension fund, the

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third biggest in the world, remember, stuck its votes behind the

:08:24.:08:27.

family because the family had done private deal with the President to

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give money to the President's friend, that would be a pretty

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serious matter. The difficulty is it's an allegation of nudge and a

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wink corruption. This is not cash in brown envelopes at, it is meetings

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with only two people present doing deals. That is the allegation and

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that is very, very difficult to prove. In the long run, how damaging

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could this be for Samsung given its recent history which, as we

:08:56.:08:59.

mentioned, exploding phone and everything, but they have been so

:09:00.:09:03.

many other issues for Samsung as playful is not who knows. But my

:09:04.:09:07.

feeling is not damaging at all, not very much damaging. You know, people

:09:08.:09:12.

purchase phones because they like the phone. And there is a history of

:09:13.:09:19.

corruption, I think that is the word we can use, at the top of the

:09:20.:09:28.

companies in this country. A lot of the political presidents have been

:09:29.:09:32.

found guilty of corruption but you get the sense that they do not

:09:33.:09:38.

really feel that is a serious crime. It is sometimes even they go to jail

:09:39.:09:43.

and sometimes they are pardoned, sometimes they are not. In this

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case, let us assume that he is found guilty and goes to jail, the company

:09:48.:09:52.

will go on, the phones will keep coming, people will purchase or they

:09:53.:09:57.

don't. Thank you very much. Quite interesting. Let's have quick look

:09:58.:10:01.

at markets in Asia so you have a sense of how the day is progressing

:10:02.:10:04.

so far. Obviously that is not the market at all. That is an apology

:10:05.:10:08.

for interrupting in our programme. We don't need that today,

:10:09.:10:11.

thankfully. Headed south today. We have Japan under pressure because

:10:12.:10:16.

the yen is going up in value. The dollar is down in reaction to the

:10:17.:10:19.

press conference from Donald Trump. More on that in a moment as we

:10:20.:10:22.

review the press. I

:10:23.:10:23.

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