tv BBC Business Live BBC News August 25, 2017 8:30am-9:01am BST
this is business live from bbc news with ben bland and jamie robertson. samsung scion jailed. 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 heirjay y lee guilty of paying bribes, we ask what it means for the future of the company. plus, the flying kangaroo bounces ahead of its rivals. qantas has posted blockbuster results today, despite cut—throat competition. 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. guru rory cellan—jones will be with us. it's announced self driving lorries will be tested on uk roads, so we lorries will be tested on uk roads, so we ask if you would be happy driving next to a 44 tonne d riverless driving next to a 44 tonne driverless juggernaut. driving next to a 44 tonne driverlessjuggernaut. 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 d riverless 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. his lawyers say he will appeal. so what exactly did he do? it started with this — $36 million donated by samsung to organisations linked to former south korean president park geun—hye. 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 father became ill in 2014. 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 that vital support. the affair has once again raised concerns about south korea's business culture — and the huge family—owned conglomerates known as ‘chaebols‘.
they've long been seen as too cosily linked to government — and not sufficiently transparent in their dealings. they are also very powerful. 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 ofa 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 injail, 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 wa nt more presidential pardons and they want big conglomerate ‘s ear to clea n 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 now spending a large amount of time injail, it gives a message 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 notjust used a samsung product or service. they are not just smartphone used a samsung product or service. they are notjust 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 19505 and into a good economic place. that's way they say there should not be a severe sentence. 0ut5ide there should not be a severe sentence. outside the court we have seen sentence. outside the court we have seen prote5t5 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 bori5 a bit of breaking news. the british foreign minister boris johnson a bit of breaking news. the british foreign minister bori5johnson has told the bbc that he thinks some of the sums for brexit 5eem 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 le55 we should not pay a penny more or a penny less than we think our legal obligations amount to in the brexit built talk5. 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 making the news. .. mu5ic streaming 5ervice spotify has signed a new licensing deal with warner music group — paving the way for an expected flotation. 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‘5 140 million users. investors have been selling off shares of supermarkets in the us after amazon said it would complete its takeover of the whole foods chain on monday. 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 has announced. 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 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 alanjoyce is calling it a vindication of his three year turnaround plan — which has involved major cost cutting. christine hart is in singapore for
us. 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 paid off in a very spectacular way. pre—tax profits atjust 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 onjet 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, alanjoyce 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. 0nce asian stocks advanced on friday. once again shrugging off a sluggish day on wall street. tokyo stocks rising, as tokyo and honda chalked up rising, as tokyo and honda chalked up games 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 takea 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 on wall street today. 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 the world at jackson hole. us federal reserve chair janet yellen speaks in the morning. mario draghi, the head of the european central bank, takes to the stage in the afternoon. in the past, this meeting has been used to make big announcements — not this time, according to many market watchers. why? 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 close to their chests. 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 to walk back his comments. 0n the economic front, watch out for the latest
durable goods orders, that's due to be released from the commerce department. joining us is nandini ramakrishnan, global market strategist at jp morgan asset management. 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 ourjanet 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 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 ofan 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 the longer ten or 30 year bonds will 9° up the longer ten or 30 year bonds will go up because there is less demand from the big buyer, the federal reserve , 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 sta rts 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 bitcoin—like digital currency. 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 in whitechapel, london. 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, hi—tech, so your tv can speak to yourfridge, it 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 exa m ples of it out, crucially. just some of the examples of things you can do in a wired home. simon, good morning, you area 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, 0k?|j 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 pa rt technology is an increasingly big part of our lives, and it is changing the way that brands sell to us. 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 afterfinding 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 of its boss over bribery. 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 cryptocurrency called estcoin. 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 0k 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 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 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 estcoi n, 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. 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, fantastic modern smartphones, they lookjust 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 thatis 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 of editors around the world. and we want to hear from you too, get involved on our web page, and on twitter, and you can find us on facebook. business live, on tv and online, whenever you need to know. nandini ramakrishnan isjoining us again. we are going to be looking at the newspapers, one particular story i wa nt to 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 thatis 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, thatis
late in the day. more importantly, that is tricky, but for market it is ha rd to 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 lack of warning. it highlights the changing influence that groups like 0pec 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 ca n inflation and emerging markets, a lot can be paid off a global move like this. that's it from business live today. 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. we have a lot of fine weather to
look forward to as we head into the bank holiday weekend, don't expect wall—to—wall sunshine, there will be quite a lot of cloud thanks to low pressure which is lingering across parts of the north and west. high pressure is trying to build from the south, and in between we should get some useful weather to get out and about. the satellite for earlier todayis about. the satellite for earlier today is showing quite a bit of cloud just draped across western parts, further south and east are enjoying a better start to our morning, some sunny spells hanging on well into the afternoon. further north and west, northern ireland, scotland, a rain band pushing his twits, the potential for scotland, a rain band pushing his twits, the potentialfor minor flooding across northern ireland, it will be breezy, so not such a nice afternoon, a potentialfor will be breezy, so not such a nice afternoon, a potential for thundery downpours as well, temperatures struggling for the time of year. into northern parts of england, just a few showers creeping in, but further south largely dry for the
midlands, wales, some cloud around with limited brightness. sunny spells across devon and cornwall, the south coast looking largely dry and fine, but the best of the weather across east anglia and the south—east, temperatures creeping up to 23, maybe even 2a celsius. as we head on into tomorrow, a much better day for scotland and northern ireland, more chance of seeing sunshine, a few showers lurking around. the best of the brightness further south and east, so a fine saturday for most of us, with temperatures cooler in the north, 13-19dc, temperatures cooler in the north, 13—19dc, up to temperatures cooler in the north, 13-19dc, up to 25, temperatures cooler in the north, 13—19dc, up to 25, maybe even 26 celsius across the south—east. sunday should be largely dry as well, just a case of how much cloud and sunshine can get through. temperatures up to 2a celsius, and then on monday, we have a weather front which will bring rain across northern and western parts, but high pressure hanging on further south,
bringing anotherfine pressure hanging on further south, bringing another fine day. so pressure hanging on further south, bringing anotherfine day. so bank holiday monday, you will need your umbrella in scotland, northern ireland and northern parts of england, but further south and east, temperatures getting up to 26 celsius, a rather one day. and for next week, remaining unsettled, some sunshine to look forward to, but also the risk of a few blustery showers. welcome to the programme convoys co nvoys of convoys of lorries controlled by one driver will be tested on england's motorways. up to three lorries will be connected by wireless technology. is it safe? to reassure people, we will start with a whole range of trials, and carefully staged off—road testing that will allow is to assess what we have done to give us to assess what we have done to give us the confidence it will work in the uk. we'll have details on how the uk. we'll have details on how the scheme will work. women who have left the armed forces say the government isn't doing enough to help them with mental health problems. you are not capable of