05/04/2016 BBC Business Live


05/04/2016

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This is Business Live from BBC News with Ben Thompson

:00:00.:00:07.

More leaked documents from Panama show how close relatives of some

:00:08.:00:16.

of China's leaders, including the president,

:00:17.:00:18.

Live from London, that's our top story on Tuesday 5th April.

:00:19.:00:37.

As tax authorities around the world promise tough action after the leak

:00:38.:00:40.

of millions of documents from a tax haven, we reveal how close relatives

:00:41.:00:46.

of senior Chinese politicians have been caught up in the scandal.

:00:47.:00:54.

India cuts interest rates to their lowest level in five years,

:00:55.:01:14.

as the country's fight against inflation seems

:01:15.:01:15.

And this is how markets across Europe have opened this

:01:16.:01:19.

morning - we'll look at what's moving the numbers.

:01:20.:01:21.

And how do you know what you buy in the shops is safe,

:01:22.:01:24.

This man has the answer - he's the head of the Consumer Goods

:01:25.:01:28.

Forum, that focuses on keeping consumers safe and making

:01:29.:01:30.

And as always we want to hear from you about any of the stories

:01:31.:01:35.

Get in touch in the usual way - #BBCBizLive.

:01:36.:01:41.

Tax authorities around the world have promised tough action

:01:42.:01:46.

after the leak of millions of documents from the Panamanian law

:01:47.:01:49.

They show how the world's rich and powerful hide their wealth

:01:50.:01:55.

They also show how leading regime figures in Syria and north Korea

:01:56.:02:01.

were able to keep their companies trading, despite being blacklisted

:02:02.:02:03.

The papers make uncomfortable reading for a number of current

:02:04.:02:08.

Close relatives of senior Chinese political leaders -

:02:09.:02:14.

including the President - are among those found to have links

:02:15.:02:17.

Our correspondent Celia Hatton has more details.

:02:18.:02:22.

Ask the wrong question, this is what happens.

:02:23.:02:26.

Chinese citizens who want their Communist leaders

:02:27.:02:28.

to list their assets are rounded up and put in prison.

:02:29.:02:32.

This is the group of men who rule China.

:02:33.:02:42.

They refuse to disclose their wealth, but they say

:02:43.:02:45.

they want to eliminate corruption from the Communist Party,

:02:46.:02:47.

punishing 300,000 officials last year alone.

:02:48.:02:50.

That makes today's news very uncomfortable for Chinese President

:02:51.:02:58.

The relatives of seven current and former Chinese leaders

:02:59.:03:02.

were found to have links to offshore companies,

:03:03.:03:04.

Of the seven named, these three are the most important -

:03:05.:03:12.

President Xi Jinping and two senior leaders.

:03:13.:03:13.

All three men have in-laws who were listed as directors

:03:14.:03:16.

or shareholders in offshore companies.

:03:17.:03:19.

It's not illegal for Chinese citizens to invest overseas,

:03:20.:03:25.

but the Communist Party bans relatives from profiting

:03:26.:03:29.

from their political connections, so this

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So far, the government is doing what it can to control the story

:03:31.:03:34.

When I enter "Panama papers" into the search engine,

:03:35.:03:43.

this is what I get, a message telling me the results violate

:03:44.:03:46.

There is growing awareness in China of a large wealth gap

:03:47.:04:02.

between the vast majority of China's ordinary people and the aristocracy.

:04:03.:04:05.

This will translate into resentment against the Party leadership

:04:06.:04:16.

and also more entrenched doubts about whether this one-party

:04:17.:04:18.

authoritarian rule is suitable for China.

:04:19.:04:21.

Slowly, we're learning more and more about how the relatives

:04:22.:04:24.

of China's leadership store their money overseas.

:04:25.:04:25.

Despite the best efforts of the Communist Party,

:04:26.:04:28.

an unexpected leak of files from halfway around the world

:04:29.:04:31.

in Panama is shedding light on China's most secretive families.

:04:32.:04:39.

And there's much more on the revelations in those

:04:40.:04:42.

documents - it's all on our website.

:04:43.:04:48.

A potential buyer for Tata Steel in the UK says he could take over

:04:49.:04:55.

the ailing business without making massive job losses.

:04:56.:05:00.

Sanjeev Gupta, head of Liberty Group, says he's had

:05:01.:05:02.

'very encouraging' talks with the Government.

:05:03.:05:04.

He thinks the plant at Port Talbot could be more efficient

:05:05.:05:06.

by replacing its large, expensive blast furnaces

:05:07.:05:15.

with cheaper, smaller arc furnaces powered by electricity.

:05:16.:05:18.

One of the world's largest aerospace firms has written to its 15,000 UK

:05:19.:05:21.

employees warning about the risks of voting to leave the European Union.

:05:22.:05:24.

In a letter to staff, Airbus says it makes "good economic

:05:25.:05:28.

sense" for the UK to stay in the EU due to its ability to trade freely

:05:29.:05:32.

While it would not relocate elsewhere in the event of EU exit,

:05:33.:05:40.

the company said it might reduce its investment.

:05:41.:05:44.

The price of oil has been volatile over the past 24 hours -

:05:45.:05:47.

amid fears over the glut in global output.

:05:48.:05:52.

Oil producers including Saudi Arabia and Russia are due

:05:53.:05:55.

to meet in Doha later this month to discuss a freeze

:05:56.:05:57.

But Iran says it won't take part in the meeting

:05:58.:06:06.

and will keep increasing exports until they reach pre-sanction

:06:07.:06:08.

We will talk more about oil, the price and what it is doing, it has

:06:09.:06:18.

been volatile, and certainly moving the market. You think of the Panama

:06:19.:06:25.

papers, a can of works, -- a can of worms, and thinking about Iceland.

:06:26.:06:35.

The Icelandic PM remains defiant, this is about 10,000 people in wreck

:06:36.:06:39.

the capital, gathering outside the parliament, 10,000 people is not too

:06:40.:06:47.

bad in a country with a population of 323,000! They are seeking the

:06:48.:06:52.

Prime Minister's resignation and the opposition party calling for a vote

:06:53.:06:54.

of no confidence because in the Panama papers there were details of

:06:55.:07:00.

the Prime Minister's family was macro financial affairs.

:07:01.:07:04.

As you can see at the bottom, he says he will not resign over this.

:07:05.:07:09.

Many world leaders seemingly have links to those offshore accounts.

:07:10.:07:14.

Can you say his name? You go for it!

:07:15.:07:20.

Sigmundur Gunnlaugsson, there we go! Fluent!

:07:21.:07:24.

India's central bank has cut interest rates by 25 basis

:07:25.:07:26.

It was widely expected - the first cut since September

:07:27.:07:32.

to bring rates to their lowest level in more than five years.

:07:33.:07:35.

Yogita Limaye is following this story for us from Mumbai.

:07:36.:07:40.

Good to see you. No surprise, is the move because we have seen inflation

:07:41.:07:52.

at the fastest-growing economy in the world, but it has dropped a

:07:53.:07:55.

little bit? Yes, over February it dropped quite

:07:56.:07:59.

sharply said there were expectations that perhaps the central bank might

:08:00.:08:04.

make a bigger rate cut, 25 basis points was expected. The bosses of a

:08:05.:08:08.

Private bank I spoke to a few days ago said there was a case to be made

:08:09.:08:13.

for a reduction of three times that much, 75 basis points. A lot of

:08:14.:08:17.

people not very excited by this move, the stock market certainly not

:08:18.:08:21.

excited, they have been in the red and bank stocks are taking a hit at

:08:22.:08:25.

this point but the governor, in his statement, has said that their

:08:26.:08:30.

stance will remain accommodating in the months to come, so there are

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expectations that if inflation remained around the 5% figure,

:08:35.:08:39.

convened -- consumer inflation, we might the rate cuts in the months

:08:40.:08:42.

ahead, too. Thanks very much.

:08:43.:08:49.

A quick look at the numbers, this is what Asia did overnight, despite the

:08:50.:08:54.

move by the Australian central bank to keep rates on hold and also the

:08:55.:08:57.

Indian central bank to cut the rate to the lowest level in five years. A

:08:58.:09:03.

quick look at what Europe is doing, the service sector will be in the

:09:04.:09:07.

spotlight today. In the UK, some suggestions that the debate over

:09:08.:09:11.

Brexit and the potential exit of the UK from the European Union could

:09:12.:09:14.

start affecting service sector figures over the course of the

:09:15.:09:17.

coming months ahead of the referendum taking place in June, so

:09:18.:09:21.

we will get a snapshot of what is happening there, and a few of around

:09:22.:09:26.

Europe, but that is currently the state of play, the FTSE 100 down by

:09:27.:09:31.

1%, although prices proving volatile, and that, as we have said

:09:32.:09:37.

in the past, really does spook the equity markets.

:09:38.:09:38.

Nicely done, nice little Segway there.

:09:39.:09:44.

I joined by a familiar face! We are going to talk about oil. It is

:09:45.:09:54.

certainly driving things lower in Asia, so volatile. Everybody is

:09:55.:09:57.

looking to the meeting later this month in Gauhar, in tata. Not a lot

:09:58.:10:03.

of hope, though? No, what is interesting is the equity markets

:10:04.:10:10.

moving, you would see lower oil prices in the past is good news for

:10:11.:10:13.

equity markets because consumers have more pounds in their pocket but

:10:14.:10:17.

now it is seen as a sign of a weakened global economy, and equity

:10:18.:10:22.

markets and the oil price are moving in lockstep. There is a showdown

:10:23.:10:27.

between Saudi and around, and if they do not come to an agreement we

:10:28.:10:31.

will not see this glut of oil disappear any time soon -- Saudi and

:10:32.:10:37.

Irani. Iran says it is not going to go to the meeting, and in some ways

:10:38.:10:41.

you cannot blame them, they have been blocked with sanctions in the

:10:42.:10:45.

past and others have stolen their market share. Iran says it wants to

:10:46.:10:49.

keep producing to get to its pre-sanction level of 4 million

:10:50.:10:54.

barrels per day, and there is just more of the black stuff, and I

:10:55.:10:57.

cannot see a light at the end of the tunnel for oil gumming up? And at

:10:58.:11:02.

the other end of the spectrum there is Russia, still pumping a lot of

:11:03.:11:06.

oil despite President Putin's promise that Russia will scale back

:11:07.:11:11.

on pumping oil, so I continued glut of oil. Also interesting, we have

:11:12.:11:18.

heard talk from Saudi Arabia about setting up this sovereign wealth

:11:19.:11:21.

fund with trillions of dollars, preparing for life after oil, so it

:11:22.:11:23.

seems the message is getting through because we have heard until now that

:11:24.:11:30.

Saudi Arabia is blind to the criticism and will try to keep up

:11:31.:11:32.

production regardless, despite debate about a cap. The message is

:11:33.:11:37.

getting through that countries which have traditionally made their money

:11:38.:11:41.

from oil need to prepare for the future? Absolutely, they need to

:11:42.:11:44.

diversify their revenue resources, and we have seen this in the

:11:45.:11:53.

markets, a lot of Sobran Wealth funds sell assets to plug the gap

:11:54.:11:55.

left by the falling oil price that has created holiday but --

:11:56.:11:59.

volatility. Where did you think they will spend that money? We have seen

:12:00.:12:03.

in the past it is spent on hotels and prime real estate in places like

:12:04.:12:07.

London, we have no idea yet where they will be spending this?

:12:08.:12:13.

Innovation, consumer, different sectors where they could spend the

:12:14.:12:17.

money, but it remains to be seen. I know you will talk us through the

:12:18.:12:20.

papers later, but for now, thank you.

:12:21.:12:23.

Saudi is also introducing austerity. For the first time ever.

:12:24.:12:27.

Yes, to stave off bankruptcy. Who Yes, to stave off bankruptcy. Who

:12:28.:12:30.

would have thought you would hear that?

:12:31.:12:33.

Move over Apple and Samsung -

:12:34.:12:35.

the world's third-largest mobile phone company,

:12:36.:12:37.

Huawei, has big plans for the smartphone in your pocket.

:12:38.:12:40.

It's got a new handset this week, but can it beat the 33% rise

:12:41.:12:44.

You're with Business Live from BBC News.

:12:45.:12:54.

The Business Secretary Sajid Javid is due to meet Sanjeev Gupta,

:12:55.:13:11.

a potential buyer of the Port Talbot steelworks,

:13:12.:13:15.

today before flying to India this evening for talks

:13:16.:13:17.

Meanwhile, David Cameron is likely to face renewed calls to nationalise

:13:18.:13:21.

the South Wales plant during talks with Wales' First Minister,

:13:22.:13:24.

Our correspondent, Andy Moore, has this report.

:13:25.:13:26.

Last week, he went to Port Talbot to tell workers he would do

:13:27.:13:29.

Later today, the Business Secretary will fly to Mumbai to meet Tata

:13:30.:13:34.

executives to discuss their timetable for the sale

:13:35.:13:36.

It's a meeting many steelworkers say should have happened some time ago.

:13:37.:13:40.

Last night, Mr Javid's deputy was feeling optimistic.

:13:41.:13:42.

A long way to go yet, but we are making good progress.

:13:43.:13:45.

Could this man be the saviour of the British steel industry?

:13:46.:13:47.

One Indian company wants to offload the company -

:13:48.:13:49.

it could be another Indian-born tycoon, Sanjeev Gupta,

:13:50.:13:51.

But he would want to run a very different type of business.

:13:52.:13:58.

The old blast furnace would be closed down and replaced

:13:59.:14:00.

Our idea is that we will look to transition from blast furnaces

:14:01.:14:12.

to arc furnaces, from imported raw material to domestically-available

:14:13.:14:18.

scrap, and from making carbon steel to what we call green steel,

:14:19.:14:22.

melting recycling scrap using renewable energy.

:14:23.:14:31.

His company Liberty has already saved this steelworks in Newport.

:14:32.:14:34.

If he were to take over Tata's other operation,

:14:35.:14:36.

he would hope to keep most of the workplace.

:14:37.:14:39.

There will be a series of meetings today involving

:14:40.:14:41.

the British Government, Welsh Government and the unions.

:14:42.:14:43.

Everybody is hoping a deal can be done to save jobs.

:14:44.:14:53.

And that story is on the Business Live page, a call to save those jobs

:14:54.:15:01.

in the UK steel industry. Some criticism that any bail-out would be

:15:02.:15:04.

throwing good money after bad and it is massive reform of the industry

:15:05.:15:08.

that is needed now not only in terms of modernising equipment but also

:15:09.:15:11.

changing processes. I did not know about the difference

:15:12.:15:14.

between the furnaces. I only learned that today, between

:15:15.:15:20.

the blast furnaces, and... They cannot be turned off?

:15:21.:15:28.

And the Ark furnaces, which are electrically powered.

:15:29.:15:35.

Our top story: As tax authorities around the globe promise action

:15:36.:15:39.

following the leak of millions of documents from the Panamanian law

:15:40.:15:42.

firm Mossack Fonseca, we reveal how close relatives

:15:43.:15:44.

of senior Chinese political leaders have been caught up in the scandal.

:15:45.:15:52.

Now, when you're out shopping, do you know, where the products

:15:53.:15:57.

you're buying have come from, who made them or whether they're

:15:58.:16:00.

Well, the Consumer Goods Forum tries to tackle issues like these,

:16:01.:16:06.

by trying to implement a global quality level to safeguard human

:16:07.:16:11.

rights and to maintain safety standards.

:16:12.:16:12.

The group represents over 400 retailers and manufacturers

:16:13.:16:14.

and operates in 70 countries around the world.

:16:15.:16:18.

Its aim is to help shoppers and consumers, focusing on food

:16:19.:16:21.

safety, ethical manufacturing, and responsible use

:16:22.:16:22.

Peter Freedman is the Managing Director of the Consumer Goods Forum

:16:23.:16:26.

Peter nice to see you. Welcome to Business Live. We touched a little

:16:27.:16:37.

bit there on what it is you do. Explain at a practical level, how

:16:38.:16:42.

does it work? How does the forum work? We bring together all these

:16:43.:16:47.

companies, multinationals and quite small regional companies and we

:16:48.:16:51.

focus basically on what we call positive change. So that's things

:16:52.:16:56.

that consumers notice, you as a shopper, you as a consumer of a

:16:57.:17:00.

product and we try and make sure that the supply chain in every

:17:01.:17:05.

respect is sustainable. We also work on things like health and wellness

:17:06.:17:09.

so we are worried about people's health and we are trying to work and

:17:10.:17:13.

help multinationals again work together to live people live

:17:14.:17:19.

healthier lives. I was going to ask you is it difficult dealing in so

:17:20.:17:23.

many countries trying to get them on an even keel and dealing with so

:17:24.:17:27.

many cultures and societies. You have thrown in another element in.

:17:28.:17:30.

Is it difficult when you are dealing with the small to the big, sometimes

:17:31.:17:36.

the big can say it is easier for us to change or we don't have the money

:17:37.:17:40.

or vice versa? It is tricky. We are led by a board. I have a board. Most

:17:41.:17:44.

companies have boards of ten or 15 people. I have a board of 50 people

:17:45.:17:49.

and each is a Chief Executive. So some of them are big companies, very

:17:50.:17:54.

big companies like Wal-Mart and Unilever and Procter and Gamble and

:17:55.:18:00.

others are smaller companies like small retailers. So in that board,

:18:01.:18:03.

first of all, you get the leadership from the Chief Executive which is

:18:04.:18:07.

really important. Often the Chief Executives want to do more good in

:18:08.:18:11.

the world than some of the folklore down. So it is really important to

:18:12.:18:17.

have the CEOs around the table and then you get the smaller companies

:18:18.:18:20.

and the bigger companies blended together. If the bigger companies

:18:21.:18:25.

lead, that's great. We want to drive positive change. Just looking at the

:18:26.:18:30.

statistics here, the forum combined sales of the organisations you work

:18:31.:18:37.

with of 2.5 trillion euros and employing ten million people. How do

:18:38.:18:40.

you effect change on that scale? I imagine you have to work with each

:18:41.:18:45.

individual organisation to come to a sum of change. How on a day-to-day

:18:46.:18:49.

basis do you get the biggest firms to listen to what you're saying? You

:18:50.:18:54.

know, they typically listen because they know it is the right thing to

:18:55.:18:58.

do. When you have a conversation it is running a little bit difficult

:18:59.:19:01.

and you are not quite sure what to do, you just say what would the

:19:02.:19:06.

consumer want you to do? It sounds trite and hokey, but it is pretty

:19:07.:19:11.

obvious. How does that relate to their bottom line? With the best

:19:12.:19:15.

will in the world, the organisations say we want to provide the best for

:19:16.:19:19.

our customers, if it is going to affect their profits or where they

:19:20.:19:22.

can operate or the costs they will need to implement to get something

:19:23.:19:25.

up to a new standard, that must be a tough decision? It is for some. For

:19:26.:19:30.

some areas like safe food, we all want safe food, we know when it is

:19:31.:19:33.

not safe, that's easy. No question, you will spend whatever it takes to

:19:34.:19:37.

drive safe food. Some of the questions that maybe a bit more

:19:38.:19:41.

long-term, so you know, is it good to get rid of the refridge rants in

:19:42.:19:49.

the atmosphere that harm the ozone layer, but then all you need is a

:19:50.:19:53.

Chief Executive to say, "I know it is the right thing to do." There are

:19:54.:19:56.

a lot of those. So it is not that hard. Talking about the right thing

:19:57.:20:00.

to do, I want to talk about one issue you have taken on board, it is

:20:01.:20:05.

food waste. It is a story we talk a lot about on our programmes. Food

:20:06.:20:10.

waste, it is $750 billion annually. Your members are part of that

:20:11.:20:13.

picture. They waste food. But they have signed up, right, to cutting

:20:14.:20:19.

that by half by, still a long way, 2025, why only half? Is that

:20:20.:20:24.

optimistic enough? Well, the trouble is you're always going to have some

:20:25.:20:29.

waste. So setting a goal of 50% reduction is stretching. Actually

:20:30.:20:33.

interestingly some of the retailers in the UK are some of the best

:20:34.:20:37.

performers in the world. So they want to spread the word and help

:20:38.:20:42.

others to do better, but yes, we are going to fix, reduce 50% of the

:20:43.:20:46.

waste in our own supply chains, but we are also signing up to some of

:20:47.:20:51.

the UN goals which are to reduce where the waste most which is in all

:20:52.:20:55.

of our homes so we are going to help that. OK. Well, Peter, short and

:20:56.:21:00.

sweet, but we really appreciate your time. I know you have got the forum

:21:01.:21:10.

in... We have a summit in Cape Town. Not Johannesburg. Wonderful Cape

:21:11.:21:15.

Town. Get some work done. It is a beautiful place. Not in June! That's

:21:16.:21:20.

why you're holding it in June! Peter, nice to see you.

:21:21.:21:25.

The world's third biggest mobile phone company,

:21:26.:21:26.

Huawei, saw its net profit grow by 33% last year.

:21:27.:21:29.

The company's explosive growth was mostly driven by the huge 4G

:21:30.:21:31.

But can Huawei build on this momentum?

:21:32.:21:37.

On Wednesday it is due to unveil its latest

:21:38.:21:40.

Analysts say it has the advantage over Apple and Samsung because it

:21:41.:21:44.

One of the key things Huawei is because it makes towers and masts

:21:45.:22:04.

for phones, they have relations with operatorsment they have been able to

:22:05.:22:09.

grow massively. Not only does it help them control cost, but they are

:22:10.:22:12.

able to design the chips to be able to do what they want for their

:22:13.:22:18.

phones. Particularly when Huawei are making their own mode dumbs and the

:22:19.:22:23.

4G towers, they are able to build these to work together very well and

:22:24.:22:26.

conserve as much battery life as possible.

:22:27.:22:32.

Maike Currie, investment director at Fidelity International

:22:33.:22:34.

Airbnb, this is a great story. This is Airbnb that says you can try

:22:35.:22:48.

before you buy. It joined up with a real estate company. If you want to

:22:49.:22:52.

buy a house in a certain place, you can move into a similar one nearby

:22:53.:22:56.

to check you like the neighbourhood and the neighbours. You can do this

:22:57.:22:59.

already, but this is, you can do it yourself, but this is an idea of

:23:00.:23:03.

being joined up, the sharing economy once again? I ti it is a brilliant

:23:04.:23:07.

idea. The biggest decision, you probably make in your life is the

:23:08.:23:13.

property that you're going to buy and browsing a property is very

:23:14.:23:16.

different to living in a prort. This gives you the option of trying to

:23:17.:23:20.

out and seeing if you like the neighbourhood. I have bought a new

:23:21.:23:27.

house, I spent longer choosing a sandwich at lunch time than I did

:23:28.:23:34.

looking at the house I just bought. This is a good way of you being able

:23:35.:23:38.

to check out that you really like it before you make the biggest purchase

:23:39.:23:46.

of your life? Absolutely. Online estate agent and Airbnb are joining

:23:47.:23:50.

forces to create new business models. It is very interesting.

:23:51.:23:54.

Let's turn our attention to... We only have a couple of minutes left.

:23:55.:24:00.

This is a similar story. This is talking of that sharing economy. One

:24:01.:24:14.

Fine Stay, it is like Airbnb, but it bought Accorhotels of France. Hotel

:24:15.:24:23.

business joining forces with these online short-term holiday rental

:24:24.:24:25.

companies to basically change the market and if you look at Airbnb,

:24:26.:24:32.

they have got 1.5 million listings across the world and they have 15

:24:33.:24:37.

million hotel rooms. It is clear the model is changing and companies have

:24:38.:24:40.

to adapt accordingly. You have got to think what is it valued? What, 24

:24:41.:24:48.

billion. It doesn't own any bricks and mortar and it is valued at $24

:24:49.:25:01.

million. AccorHotels paid $129 million. Some say it is too little.

:25:02.:25:07.

It raises questions about valuations and whether the tech sector is

:25:08.:25:10.

heading for hard times. It is the one that gets in that gets the name

:25:11.:25:15.

known and it is a self fulfilling thing more people use it and more

:25:16.:25:19.

people stay and this is what this one might have suffered from. Have

:25:20.:25:30.

you heard of Onefinestay? No. Let's talk about the new rules on tax

:25:31.:25:40.

inversion. How they are threatening this Pfizer Allergan deal. You have

:25:41.:25:47.

got 15 seconds? Small companies by overseas rivals and change their

:25:48.:25:51.

domiciles. The Treasury is clamping down on this and it is really

:25:52.:25:53.

questioning whether the deal is going to go ahead or not?

:25:54.:26:01.

Well done. Just one in the ear!

:26:02.:26:03.

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