India loses international arbitration case, says Devas

Jul 26, 2016 0

Chennai–India has lost its arbitration case in an international tribunal against the Bengaluru-based Devas Multimedia Private Ltd. for cancelling the space/satellite contract with the government-owned Antrix Corporation, Devas said on Tuesday.

In a statement, Devas said: “A Permanent Court of Arbitration (PCA) tribunal has found that the government of India’s actions in annulling a contract between Devas and Antrix Corporation Ltd., and denying Devas commercial use of S-band spectrum, constituted an expropriation.”

The ruling on Monday was the second by an international tribunal arising out of the cancellation of the Devas-Antrix contract, the statement added.

The Hague-based Permanent Court of Arbitration tribunal (PCA) also found that India breached its treaty commitments to accord fair and equitable treatment to Devas’s foreign investors.

Antrix is the commercial arm of Indian space agency, the Indian Space Research Organisation (ISRO).

The PCA regularly administers cases involving states, including investment treaty claims brought under the arbitration rules of the United Nations Commission on International Trade Law (UNCITRAL), said Devas.

According to Devas, the unanimous decision included the arbitrator appointed to the tribunal by India.

In an earlier decision, an International Chamber of Commerce (ICC) tribunal in 2015 found unanimously that Antrix’s repudiation of the Devas-Antrix contract was unlawful, and awarded Devas damages and pre-award interest of approximately $672 million, plus post-award annual interest accruing at 18 per cent until the award is paid in full.

The courts in the United Kingdom and France have recognised the ICC award and held it to be enforceable.

According to Lawrence Babbio, Chairman of Devas, with the PCA award, two international tribunals have now unanimously agreed that financial compensation should be paid after annulment of Devas’s rights.

“Other courts in France and the United Kingdom have agreed that the award against Antrix ought to be enforced. We prefer a mutually agreeable resolution of this matter. But until that occurs, Devas and its investors will continue to press their claims before international tribunals and in courts around the world,” Babbio was quoted as saying in the statement.

The PCA tribunal unanimously found that by annulling the contract in 2011 and denying the commercial use of S-band spectrum, the Indian government expropriated the investments of Devas’s foreign shareholders and also acted unfairly and inequitably, thus making it liable to pay financial compensation.

Antrix entered into an agreement with Devas in 2005 for the long-term lease of two ISRO satellites operating in the S-band.

However, the then United Progressive Alliance government cancelled the controversial contract in February 2011, invoking sovereignty and decided to use the advanced satellite for the country’s strategic use.

Under the annulled deal, Antrix was to lease satellite transponders to Devas for allowing it to offer digital multimedia services using the S-band wavelength (spectrum), reserved for strategic purpose.

Incidentally, the space agency launched the GSAT-6 on August 27 from its spaceport at Sriharikota in Andhra Pradesh, about 90 km north of Chennai, as a communication satellite, using a heavy rocket.

S. Rakesh, Chairman-cum-Managing Director of Antrix Corporation Limited, was not available for comments.

In June 2016, the Enforcement Directorate (ED) had issued a notice to Devas for alleged violation of foreign exchange laws involving around Rs 1,200 crore.

According to a government statement, Devas Multimedia is suspected to have received foreign direct investment of Rs 578.54 crore between May 2006 and June 2010 from various overseas investors, including CC Devas Mauritius Ltd, Telecom Devas Mauritius Ltd, Deutsche Telkom Asia Pvt. Ltd. and Devas Employees Mauritius Pvt. Ltd. in violation of the provisions of the Foreign Exchange Management Act.

The ED said the share subscription agreements entered by Devas Multimedia with the investors contained clauses relating to settlement of disputes in courts other than those in India and applicability other than Indian laws in matters of dispute.

As a result, the ED said, the FDI received by the firm was contrary to the conditions specified in the approvals granted by Foreign Investment Promotion Board.

The extent of contravention on the said count is Rs 578.54 crore, the ED said.

The ED also charged Devas Multimedia with contravening the FDI regulations under FEMA for assuring foreign investor an annual eight per cent priority dividend in addition to other dividends on cumulative basis.

The investments received by the Indian company with such assured returns is Rs 571.72 crore, the statement said.

According to the ED, Devas, for one tranche of receipt of funds, issued a security akin to an External Commercial Borrowing (ECB) promising higher returns than the ceiling fixed by the Reserve Bank of India. The extent of violation on this count is Rs 67.50 crore, the ED said.

According to the probe agency, a show cause notice has been issued to the Indian investors, the persons responsible in the Indian company, including its directors and foreign investors.

The ED has initiated the adjudication process. In case the alleged contravention is proved in the adjudication proceedings, the noticees are liable for penalty under FEMA, which may be imposed up to thrice the sum involved in such contravention.

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Seventh pay panel bonanza for Indian government employees in August

Jul 26, 2016 0

New Delhi– The Central government employees will get fatter paychecks starting from August salaries, according to a gazette notification issued by central government on the Seventh Finance Commission report here on Tuesday.

The central government has decided to implement the seventh pay panel recommendations on salary and pension hike for its employees with effect from January 1, 2016, according to the gazette.

The pay panel outlay is pegged at Rs 1.02 lakh crore (or over $15 billion) from the government treasury during the current fiscal year.

The 16 per cent pay hike and 24 per cent increase in pension, with arrears from January this year, will affect 47 lakh serving central government employees and 53 lakh pensioners.

With regards to the allowances, Union Finance Minister Arun Jaitley late last month said till a final decision was taken by a panel headed by the Finance Secretary, all existing perks will be paid at the “existing rates”.

The notification said as regards to the annual increment, instead of the earlier July 1, now there will be two dates of January 1 and July 1.

In a year the employee will be entitled for increment at one of these dates depending on his date of appointment, etc.

The minimum monthly salary of a central government employee has been fixed at Rs 18,000 from earlier Rs 7,000.

The maximum will now be Rs 2.5 lakh for the Cabinet Secretary, which is more than double the current pay of Rs 90,000 a month for the country’s top bureaucrat.

For other officers in the top scale — secretary or equivalent — the monthly salary will now be around Rs 2,25,000.

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Emphasis on research, cloud to herald digital transformation in India

Jul 25, 2016 0

By Nishant Arora

New Delhi– As the country moves to attract more people from around the globe for its initiatives like ‘Make in India,’ ‘Digital India’ and ‘Smart India’, the country has already become one of the fastest growing regions for software major Adobe across Asia-Pacific, especially in the Cloud-based IT services and research.

The company’s cloud solutions are already powering the digital transformation wave for India, according to Kulmeet Bawa, Managing Director, South Asia, Adobe.

Kulmeet Bawa, Managing Director, South Asia, Adobe.

Kulmeet Bawa, Managing Director, South Asia, Adobe.

“Most of the country’s leading brands across sectors are our customers, including Indigo Airlines, Mindtree, MakeMyTrip, SpiceJet, Airtel, Flipkart, Manipal Education and IDFC Bank, among others,” Bawa told IANS.

Adobe, which came to India in 1997, currently has 3,700 employees at its two major offices in Noida and Bengaluru and the newly-launched branch office in Gurgaon.

Riding on the success of its cloud portfolio, Adobe achieved revenue of approximately $4.8 billion in fiscal 2015.

“The market demand for our cloud solutions has seen us achieve record quarterly revenue of $1.4 billion for the second quarter in the fiscal year 2016, representing year-over-year growth of 20 percent,” Bawa added.

Adobe’s in-demand Creative Cloud business offers tools and services for creating digital media. The other two — Document Cloud which provides a modern way to manage documents across devices and Marketing Cloud which delivers solutions for data-driven marketing — are also seeing a sharp rise.

According to a recent Adobe-sponsored International Data Corporation (IDC) survey, 72 percent of businesses reported that improving document processes would increase customer satisfaction and yet 80 percent of those processes still rely on paper.

Adobe India continues to see major growth and India is, in fact, one of the most strategic markets for the company globally. “A key differentiator for Adobe India is its contribution to the company’s intellectual property creation and ensuring that an outstanding customer experience is delivered,” Bawa added.

The research and development (R&D) centre in India is an integral part of the company’s innovation agenda, proving to be a significant contributor in creating, developing and supporting products and innovations.

“On average, Adobe India lab files two patents per person per year and this number is growing as we speak — a significant number for any R&D setup to take pride in. For Adobe Marketing Cloud specifically, the India R&D centre has already filed around 10 patents this year,” he told IANS.

In an era of the connected consumers, Indians are using more content across more devices than ever before and expect amazing experiences to be delivered to them.

“At Adobe, we believe that standout customer experiences are the core of driving meaningful, measurable impact and transforming how companies do business. Whether it’s on the design, content, data or document management, we take pride in delivering great customer experiences that are compelling, personal, useful and relevant to users,” Bawa asserted.

In India, the company is experiencing strong growth momentum in verticals ranging from education, travel and hospitality, banking, financial services and insurance (BFSI), IT and ITeS, media and entertainment and government agencies, among others.

“Going ahead, our strategy will be to continue leveraging this market opportunity and strengthen our position in the market,” Bawa noted.

Being one of its largest operations worldwide, over a third of Adobe’s overall research and development are happening out of the India labs. “In many aspects, our India R&D centre has end-to-end ownership of the products or solutions, including requirements for research and development, testing and even marketing of the product,” the Adobe executive informed.

The lab has worked on cutting-edge research areas like big data, data analytics, machine learning, social work analysis and natural language processing.

“Investing in human capital is another big focus for us. For instance, we have appointed noted computer scientist Anandan Padmanabhan as vice-president, Adobe Research, to head our Big Data Experience Lab (BEL) in Bengaluru,” Bawa said.

When it comes to ‘Smart Cities,’ Adobe is involved in states like Gujarat where its technologies have bridged the digital divide across more than 18,000 villages so far.

“The success we are experiencing here is a testament to our strong presence in the country and the exploding demand for digital experience solutions in the country,” Bawa noted.

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Karnataka unveils booster kit for start-ups

Jul 25, 2016 0

Bengaluru–Karnataka on Monday unveiled a booster kit to nurture start-ups in the state with funding and hand-holding till they flourish.

“The booster kit provides software tools, cloud credits, access to mentors, legal and consulting accountants and access to government funding and government supported incubators,” state IT & BT Minister Priyanka Kharge told reporters here.

Priyanka Kharge

Priyanka Kharge

Announcing Rs.400 crore funding over the next four years as grant or equity for start-ups, micro and small IT and BT (biotech) enterprises, he said the Karnataka Biotechnology and IT Services (KBITS) would also help them in marketing and promotion.

“The KIBITS will sponsor participation of start-up entrepreneurs to attend networking events at national and international levels, administer tax incentive and assist them in patent filing,” Kharge said.

The new minister also said he plans to hold an open house event every month for start-ups to interact with department officials for addressing issues related to their operations.

The first open house will be held on August 16 at the state-run 10,000 start-ups warehouse in this tech hub.

“Bengaluru is the second fastest-growing start-up ecosystem in the world and the only Indian city to be ranked among the best 15 start-up ecosystems the world over,” Kharge said.

The state government has also set up a cell in KBITS to implement policy initiatives and provide incentives for incubating start-ups.

“A start-up portal (www.startup.karnataka.gov.in) will soon be launched to educate prospective entrepreneurs on our policy and benefits being offered under the booster kit,” Kharge added.

In partnership with the IT industry’s representative body Nasscom, the state government has set up 725 seats to support incubators in the warehouse, in which 325 seats are available at subsidised rate for setting up start-ups.

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Harvard Professor Gita Gopinath Appointed Financial Advisor to Kerala Chief Minister Pinarayi Vijayan

Jul 25, 2016 0

WESTON, MA– Gita Gopinath, a professor of International Studies and Economics at Harvard University and a resident of Weston, MA, has been appointed financial advisor to newly-elected Kerala Chief Minister Pinarayi Vijayan.

Gita Gopinath (Photo courtesy: Harvard University)

Gita Gopinath (Photo courtesy: Harvard University)

Her appointment, however, has caused some controversy, according to news reports by Hindu newspaper and Press Trust of India. The ruling Communist Party of India (CPI) in Kerala said her appointment would not have any effect on the basic economic policies of the Left government.

CPI State secretary Kanam Rajendran was quoted as saying that it was the Chief Minister’s discretion to appoint a person to advise him on financial matters and it has nothing to do with the economic policies of the government.

Gopinath could not be reached for comment for this story.

“The LDF government is going ahead based on the election manifesto, which will be the basic doctrine for formulating our economic policies. Our slogan is to formulate an alternative to the neo-liberal economic ideologies. There will be no deviation from that stand,” Rajendran told PTI.

Stating that there is no room for such fears, Rajendran said that Gopinath would only be the Chief Minister’s adviser and would have nothing to do with the LDF government, according to Hindu newspaper.

Gopinath is the John Zwaanstra Professor of International Studies and of Economics at Harvard University. Her research focuses on International Finance and Macroeconomics. She is a visiting scholar at the Federal Reserve Bank of Boston, member of the economic advisory panel of the Federal Reserve Bank of New York, a Managing Editor of the Review of Economic Studies, co-editor of the current Handbook of International Economics, and a research associate with the National Bureau of Economic Research (NBER) for the programs in Economic Fluctuations and Growth, International Finance and Macroeconomics, and Monetary Economics, according to her bio at Harvard University website.

Gopinath also served as a member of the Eminent Persons Advisory Group on G-20 Matters for India’s Ministry of Finance. In 2011, she was chosen as a Young Global Leader by the World Economic Forum. Before coming to Harvard, she was an assistant professor of economics at the University of Chicago’s Graduate School of Business.

Gopinath holds B.A. in Economics (Honors) from Lady Shri Ram College and Masters in Economics from Delhi School of Economics.

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India at National Democratic Convention: Continue Strategic Partnership With New Delhi

Jul 25, 2016 0
Hillary Clinton

Hillary Clinton

PHILADELPHIA—The Democratic Party manifesto promises to invest in long-term strategic partnership with India under the leadership of Hillary Clinton. The convention will officially nominate Clinton for the presidency of the United States.

The 4,762 delegates elected to the Democratic Party Convention in Philadelphia this week by rank and file include several Indians. Amit Jani, the media person for South Asians for Hillary, told IANS that South Asians were involved in the Convention and the campaign at all levels.

“We are excited to be a part of the historic Convention and working for Hillary Clinton’s victory,” said Jani.

About India, the party manifesto for the November election that will be adopted at the Convention says, “We will continue to invest in a long-term strategic partnership with India — the world’s largest democracy, a nation of great diversity, and an important Pacific power.”

Clinton’s model of the presidency hews to essentially a continuation of President Barack Obama’s eight-year rule of moderation and international involvement, with a progressive shift reaching out to the middle classes and the poor who feel insecure despite the economic rebound from the Great Recession legacy of George W. Bush.

She goes up against Republican nominee Donald Trump, who has made terrorism and law and order the centerpiece of his campaign, while also railing against Wall Street which he – and Sanders supporters – link to Clinton.

(Materials in this article are used from IANS.)

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Indian corporate balance sheets weak, reforms slowing

Jul 24, 2016 0

Beijing– The International Monetary Fund (IMF) has warned that headwinds from weaknesses in Indian corporate and bank balance sheets, slowing pace of reforms and sluggish exports may weigh on the country’s economic growth.

“Headwinds from weaknesses in India’s corporate and bank balance sheets, a decelerating pace of reforms, and sluggish exports will weigh on growth,” IMF said in a “Note on Global Prospects and Policy Challenges” prepared for the two-day meeting of G20 Finance Ministers and Central Bank Governors’ Meetings concluding on Sunday.

India’s “economy is on a recovery path, helped by lower oil prices, positive policy actions and improved confidence”, the report said.

The reported listed as many as six core areas that need further reforms in India. These are product market, labour, infrastructure, banking, legal system and property rights, and fiscal structural reforms.

“The quality of fiscal consolidation in India should be improved through a comprehensive tax reform (such as introducing the goods and services tax and improving tax administration) and measures to further reduce subsidies,” IMF said.

“With shrinking fiscal buffers, many commodity exporters need to develop new growth models and tackle fiscal adjustment including through reduced but more efficient public expenditures, stronger fiscal frameworks, and mobilising new sources of revenues,” it added.

India has been found to have done well on three out of nine “reform priorities”– innovation, capital market development and trade and FDI liberalisation.

The IMF also said further steps to relax long-standing supply bottlenecks, as well as labour market reforms, are crucial to achieving faster and more inclusive growth in India.

Earlier this week, the IMF marginally lowered India’s growth forecast to 7.4 per cent for 2016 and 2017, from the 7.5 per cent in April, due sluggish recovery in private investment, even as it blamed Brexit for provoking global economic uncertainty.

“In India, economic activity remains buoyant, but the growth forecast for 2016-17 was trimmed slightly, reflecting a more sluggish investment recovery,” the IMF said in its latest update of World Economic Outlook.

“The outcome of the UK vote, which surprised global financial markets, implies the materialisation of an important downside risk for the world economy. As a result, the global outlook for 2016-17 has worsened, despite the better-than-expected performance in early 2016,” the multilateral agency said.

The IMF also lowered the global growth forecast for 2016 by 0.1 percentage point relative to April, to 3.1 per cent.

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Australia to help train Indian sportspersons, coaches

Jul 24, 2016 0

Chandigarh– The Australian government is in the advanced stage of signing an MoU with the Punjab Institute of Sports to provide training to the sportspersons and coaches to upgrade their skills in the sports, Australian High Commissioner to India Harinder Sidhu said on Sunday.

She also said that the Australian government was also striving hard to ink another MoU with the National Institute of Sports, Patiala, on the same lines.

Sidhu, who is on her first visit to Punjab, the state from where her family has its roots, offered to help Punjab in developing Ludhiana, Jalandhar and Amritsar as smart cities.

“Australia has a proven track and expertise in urban development due to its architectural and engineering marvels known for their sheer acumen and techniques,” she told Punjab Chief Minister Parkash Singh Badal during a meeting here.

Badal sought cooperation from the visiting Australian High Commissioner in the fields of education, skill training, agriculture and urban development.

Seeking Australia’s experience and expertise in fields like agriculture, food processing and horticulture, he urged Sidhu to help the state to provide high yield quality wheat seed to further enhance its quantum of production as Australia had the highest yield of wheat per hectare in the world.

Badal also requested her to initiate a farmer exchange programme between Punjab and Australia so as to enable the progressive farmers to learn about new techniques and modern farm practices of agriculture to maximize their yield.

The Chief Minister invited Sidhu to visit their ancestral village Dharamkot in Moga district next time along with her parents and family.

The Australian envoy later offered prayers at the famous Nada Sahib gurdwara in adjoining Panchkula town, 20 km from here.

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Bankers on India’s new scheme to fix bad loans

Jul 24, 2016 0

By Bappaditya Chatterjee

Kolkata– Bankers are looking forward to the Reserve Bank of India’s (RBI’s) new scheme to tackle bad loans. But they are also keeping their fingers crossed owing to its limited applicability, as also the absence of provisions to cut down lengthy legal processes.

Though previous tools to arrest mounting non-performing assets (NPAs) did not provide satisfactory results, bankers have started examining the applicability of the ‘Scheme for Sustainable Structuring of Stressed Assets’ (S4A) introduced last month by the apex bank.

Crisil has estimated weak assets in the Indian banking system to touch a high of Rs 800,000 crore by the end of the current fiscal. The RBI’s latest Financial Stability Report suggested that the GNPA (Gross non-performing asset) ratio might rise to 8.5 per cent by March 2017 from 7.6 per cent in March 2016.

The new scheme envisages banks will need to divide the existing debt of a company into “sustainable” and “unsustainable”. The sustainable part is that share of the debt that can be serviced by the company on the strength of its current cash flows.

As for the unsustainable amount, banks are allowed to convert that part of the debt to equity or quasi-equity instruments. The scheme provides for determining the sustainable amount of the debt through a techno economic viability (TEV) study to be conducted by an independent body.

The TEV study is required by the banks to understand the risks inherent in any restructuring of loans.

“TEV study is important for the projects, because it helps to determine which part is sustainable and which is not. There are ifs and buts with regard to S4A,” said United Bank of India’s Executive Director Sanjay Arya.

“But shortcomings or weaknesses, if any, would be detected after the scheme is tested. Not many proposals have come so far,” Arya told IANS. He also felt the scheme may not impact the lengthy legal and judicial processes.

“The scheme is apparently fine but the huge time taken for judicial and legal processes is not going to go away,” Arya said.

Another top banker said the applicability of the scheme to various stressed companies was being looked into.

“We are currently examining the applicability of this scheme to various companies under stress. So far we have not approved any proposal under the scheme,” State Bank of India Managing Director (Corporate Banking) B. Sriram told IANS.

According to the scheme, it will cover projects that have started commercial operations and have outstanding loan of over Rs 500 crore. Thus there is limited applicability of the scheme.

“There are different schemes available. S4A is applicable to some stressed corporates while some others will not be eligible. The scheme is good and let us see, how it pans out,” said Dena Bank Chairman and Managing Director Ashwani Kumar.

Sriram said it was a meaningful scheme for some of the companies.

“It gives opportunity to the promoter to restructure his business and service the debt. At the same time the scheme also ensures sacrifice on the part of promoters and incentivises the successful implementation of the scheme due to improvement in value of the company,” he said.

In a bid to deal with stressed companies, the RBI had earlier formulated schemes like corporate debt restructuring (CDR), joint lenders forum (JLR), strategic debt restructuring (SDR), A5/25 scheme and sale of assets to asset reconstruction companies. But the level of non-performing assets has continued to rise.

Asked to compare the previous schemes with S4A, Sriram said: “The schemes have different purposes and benefits. They can be applied to different companies facing different types of issues.”

Another leading rating agency was bullish about the independent TEV study envisaged by the new scheme.

“In the past, accounts, which were refinanced/ restructured after TEV studies, have not shown satisfactory performance,” said ICRA’s Senior VP and Co-head Financial Sector ratings Karthik Srinivasan.

The key difference between SDR and S4A lies in that while the earlier formulation prescribes change in existing promoters, S4A as such does not prescribe change in existing promoters, Srinivasan told IANS.

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Indian government asks states to remove local taxes, cap prices of essentials

Jul 24, 2016 0

New Delhi–The Centre has urged states to remove all local taxes and consider capping the prices of pulses, edible oils and other essential commodities to help make these available at “reasonable prices”.

States have also been requested to keep a close watch on hoarding and black-marketing of essential commodities in view of the coming festival season, said a statement issued on Sunday by the Ministry of Consumer Affairs, Food and Public Distribution.

Ram Vilas Paswan, Minister of Consumer Affairs, Food and Public Distribution.

Ram Vilas Paswan, Minister of Consumer Affairs, Food and Public Distribution.

“In a letter written to Chief Secretaries, Hem Pande, the Secretary of Department of Consumer Affairs, has asked the states to take up market intervention on a real time basis and to review APMC Acts on priority to delist pulses and other essential food items so that farmers can sell their produce at any place of their choice,” said the statement.

“It will ensure reasonable prices for consumers and also fetch better prices for farmers,” it said.

An Agricultural Produce Market Committee (APMC) Act requires farmers to sell their produce only to middlemen approved by the government in authorised Mandis.

The Consumer Affairs Secretary has invited states’ attention towards the action plan adopted for this purpose at the states food ministers’ meeting held in May this year.

“States have also been requested to consider a pricing policy for pulses and such other essential food items under Section 3(2) (c) of the Essential Commodities Act and to make it enforceable for all the stake-holders to cap the prices of essential commodities,” the statement said.

Hem Pande also asked the states to implement the Price Stabilisation Fund Scheme for market intervention to enhance availability and check prices of essentials.

States have been asked to create a robust information management system of prices, production, availability, unscrupulous trading, hoarding, black marketing and to strengthen the price monitoring cells to have the ground zero information available on a daily basis.

“A monthly report on enforcement actions under the Essential Commodities Act and Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act is mandatory to ensure regular review of the same at highest level and to make public the Action Taken Report of States regularly on the website of Department of Consumer Affairs,” the statement said.

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