Koh and Minister for Immigration and Citizenship
[2008] AATA 724
•18 August 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 724
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/6067
GENERAL ADMINISTRATIVE DIVISION ) Re KOWIT CHWEE BOK KOH Applicant
And
MINISTER FOR IMMIGRATION AND CITIZENSHIP
Respondent
DECISION
Tribunal Professor T Sourdin, Member Date18 August 2008
PlaceSydney
Decision
For the reasons given orally at the hearing of this matter, the Tribunal affirms the decision under review. As a consequence Mrs Koh’s (Irene Yeo Geok Choo’s) visa is also cancelled. The Tribunal refers the matter back to the Minister for the appropriate action to be taken.
………[Sgd]……………………..
Professor T Sourdin Member
CATCHWORDS
IMMIGRATION – Business Skills Visa - cancellation – whether Applicant made a genuine effort to obtain a “substantial ownership interest” in an “eligible business” in Australia – efforts post cancellation - residual discretion – decision under review is affirmed.
Migration Act 1958 – sections 134(1), 134(2), 134(3), 134(10)
Chen and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 1023
Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577
Freeman v The Secretary, Department of Social Security (1988) 19 FCR 342
Hope v Bathurst City Council (1980) 144 CLR 1
Kim v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 38 AAR 304
Re Angkadjaja and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 699
Re Badenhorst and Minister for Immigration and Multicultural Affairs [2006] AATA 742
Re Burg and Minister for Immigration and Citizenship [2007] AATA 1630Re Griffiths and Migration Agents Registration Authority [2001] AATA 240
Re Harlim and Minister for Immigration and Multicultural Affairs [2002] AATA 767
Re Huang and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 656
Re Karim and Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 56
Re Lau and Minister for Multicultural Affairs (2002) 35 AAR 395
Re Tang Minister for Immigration and Multicultural and Indigenous Affairs [2000] AATA 997
Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283
Rokobatini v Minister for Immigration Multicultural Affairs (1999) 90 FCR 583
REASONS FOR DECISION
19 August 2008 Professor T Sourdin, Member
BACKGROUND
1. Mr Koh was granted a Business Skills (Migrant) (Class AD) (Subclass 127 – Business Owner) visa to which I shall refer as a business visa, on 29 March 2004. He and his wife, had previously been living in Singapore and were citizens of Singapore. From 1989, Mr Koh was the managing Director of a Singapore Company with an annual turnover of more than AUS$7,000,000 per annum. When he came to Australia on his business visa on 23 October 2004 he decided to no longer be the managing director of this company and took up a director role while retaining a majority shareholding in the Singapore Company.
2. In the application that Mr Koh made prior to being granted a business visa, he indicated that he wanted to set up a trading company that would be focussed on industrial/ electrical equipment that could then market products in South East Asia through his Singapore Office. He planned to identify an Australian Company and then link that company with a Singapore Company (ST22).
3. However, after coming to Australia he found that there were few companies that could support such arrangements. Evidence was given about efforts that were made in 2005 to contact other companies. As a result of those efforts being unsuccessful, Mr Koh decided to take some ownership interest and become involved in a small company that was not registered until 3 February 2006 called Green Valley Vegetarian Health Food (“Greens”).
4. Mr Koh had understood this would fulfil the requirement that he acquire an interest in an Australian business, and have a role in its day to day management because his intention was to comply with the requirements of the Business Visa, and to live in Australia. He acknowledges that it was not sufficient as the arrangement with Greens was short lived. It would seem that Mr Koh invested $50,000 in this business but was only involved in the business for a few months before he withdrew his funding and involvement as a result of a partnership disagreement. I was satisfied from the evidence, (Mr Koh’s evidence and the T-documents), that not notwithstanding the material noted in the 24 month survey report (T11) that Mr Koh had minimal involvement with Greens and that the involvement that he had was short lived and did not continue beyond the period February 2006 to June 2006. After this period Mr Koh had found work as an electrical contractor and invoices relating to this work for the period 16 July 2007 to 25 November 2007 were supplied (A1).
5. Mr Koh’s Business Visa was cancelled on 26 November 2007 by a delegate of the Department of Immigration and Citizenship pursuant to section 134 of the Migration Act 1958 (“the Act”).
6. Mr Koh was not represented at the hearing of this matter. The matter was initially listed for hearing on 18 July 2008. It was adjourned on that day to enable Mr Koh to produce more evidence about his attempts and efforts to set up a business in Australia. After hearing some evidence on 18 July 2008, directions were made for the Applicant to file and serve any additional evidence. This was done on 8 August 2008 and the matter was listed for hearing again on 18 August 2008. It seemed that Mr Koh was arguing that if he did not satisfy the requirements of section 134(1) of the Act, the visa should still be granted because of genuine efforts to obtain a substantial ownership interest in an eligible business in Australia.
7. Mr Koh and his wife do not have children. Their elderly parents are either deceased or reside in Singapore and their assets have remained in Singapore. Their siblings reside in Singapore. Mr Koh and his wife sold their two storey house in Singapore in 2006 and the funds from this sale were placed in Mr Koh’s Singapore based superannuation account that cannot be accessed until he reaches the age of 55. Mr Koh is currently 46 years old. There was no evidence in the circumstances as given to me, that would constitute extreme hardship in terms of the legislation.
8. Mr Koh and his wife were both born in Singapore, have significant assets there, and can return there at any time.
9. I was not satisfied from the evidence that the visa should not be cancelled even after considering the residual discretion pursuant to Kim v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 38 AAR 304.
10. Accordingly, I affirm the decision of the Minister. My reasons follow.
ISSUE BEFORE THE TRIBUNAL
11. The issue to be decided was whether the Tribunal would, pursuant to section 134(1) of the Act, affirm, vary or set aside the decision of the Respondent to cancel Mr Koh’s Business Skills visa, and Mrs Koh’s visa.
12. In deciding this issue, I had to consider whether Mr Koh satisfied s 134(1) of the Act, which provides:
Subject to subsection (2) and to section 135, the Minister may cancel a business visa (other than an established business in Australia visa, an investment‑linked visa or a family member’s visa), by written notice given to its holder, if the Minister is satisfied that its holder:
(a)has not obtained a substantial ownership interest in an eligible business in Australia; or
(b)is not utilising his or her skills in actively participating at a senior level in the day-to-day management of that business; or
(c)does not intend to continue to:
(i)hold a substantial ownership interest in; and
(ii)utilise his or her skills in actively participating at a senior level in the day-to-day management of;
an eligible business in Australia.
Does Mr Koh have a substantial interest in a business?
13. Mr Koh gave evidence that he had invested over $50,000 for a short time in Greens since arriving in Australia and had not invested anything in any other company. This amount had been withdrawn following his decision not to retain any interest in Greens in 2006 a few months after the investment had been made.
14. The Procedures Advice Manual 3 (“PAM3”) sets out advice for the making of decisions under s 134 of the Act. I accept that PAM3 is part of the decision-making process (Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577) and is the policy I should apply in order to reach a decision (Rokobatini v Minister for Immigration Multicultural Affairs (1999) 90 FCR 583). PAM3 guidelines suggest a 'substantial ownership interest' is a matter of fact and degree or proportion, but that officers should consider an ownership interest of at least 10 per cent or a value of at least $100,000 as indicative of substantial ownership.
15. In my view, Mr Koh has not held a substantial interest in a relevant Australian business since he was the holder of a subclass 127 visa. Even if the temporary holding was a sufficient interest (which it was not as it was of a temporary nature and the amount of the holding was low) there are significant issues about whether Greens could be classed as an eligible business. I have dealt further with the eligible business aspect after the analysis below about the degree of his involvement in the business.
How much did mr Koh involve himself in the business?
16. Subsection 134(1)(b) states that the Minister may cancel a business visa if the visa holder is not utilising his skills in actively participating at a senior level in the day-to-day management of that business. I have examined whether Mr Koh engaged in the business and on balance find that his interest and involvement was of a temporary nature while the business set up was taking place. There is no evidence relating to his engagement other than preparation of a business plan that was annexed to the business survey that was returned to the Department. There was no correspondence or other information relating to his involvement with Greens.
17. The PAM3 further points out that the purpose behind business skills migration is to attract to Australia highly skilled business people who will use their skills to engage in business in Australia. Paragraph 8.2 details the form which evidence of day-to-day management could take, and includes:
(a)Business correspondence or a statement from the business outlining the visa holder’s duties and involvement in the day-to-day management of the business;
(b)Business correspondence, emails, attendance at meetings or facsimiles showing participation by the visa holder in day-to-day management of the research, negotiations or decision making for the business;
(c)If the visa holder has spent most of their time outside Australia, evidence of how the visa holder has been managing, on a day-to-day basis, their Australian business from overseas (i.e. faxes, emails, presence at trade fairs, etc).
18. While the guidelines simply suggest a means of demonstrating daily involvement, Mr Koh has not provided the type of evidence suggested beyond a very basic business plan.
Did Mr Koh have an interest in an eligible business?
19. As noted above, I am also concerned that Greens was not an eligible business. An eligible business is one which must meet special criteria. Section 134(10) of the Act defines eligible business as one that the Minister reasonably believes is resulting in or will result in one or more of the following:
(a)the development of business links with the international market;
(b)the creation or maintenance of employment in Australia;
(c)the export of Australian goods or services;
(d)the production of goods or the provision of services that would otherwise be imported into Australia;
(e)the introduction of new or improved technology to Australia;
(f)an increase in commercial activity and competitiveness within sectors of the Australian economy.
17. PAM3 also provides notes about how to interpret the definition of eligible business in subsection 134(10) at paragraphs 7.4 to 7.10. These are similar to the legislative provisions but have a little more detail. Matters that may be taken into account include:
(a)Development of business links (s 134(10)(a)) – Paragraph 7.5 of the PAM3 states that visa holder must demonstrate that the business, as opposed to the visa holder, has created or will create business links between Australia and the overseas market;
(b)Creation/maintenance of employment in Australia (s 134(10)(b)) – Paragraph 7.6 of the PAM3 provides that the visa holder should demonstrate that by virtue of their involvement in the business, new employment opportunities have been created in Australia, or existing positions have been maintained;
(c)Increase in commercial activity/competitiveness within the Australian economy (s 134(10)(f)) – The PAM3 provides at paragraph 7.10 that the mere existence of a business does not necessarily mean the business is increasing commercial activity and competitiveness. It is expected that the business can demonstrate it has directly enhanced competitiveness/commercial activity in particular ways.
20. In my view the scant evidence, such as it is, does not indicate that the business was an “eligible business” as what little evidence that is available does not meet any of the criteria noted above.
21. In short, I do not consider that the requirements under section 134 (1) of the Act are met.
22. I also have to consider whether Mr Koh has made a genuine effort to satisfy the tests in section 134(2) of the Act, that is whether he:
(a)has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia; and
(b) has made a genuine effort to utilise his or her skills in actively participating at a senior level in the day-to-day management of that business; and
(c)intends to continue to make such genuine efforts.
23. I was mindful also of the residual discretion which can be exercised pursuant to the decision in Kim, and the discretion which can be exercised in favour of an Applicant in that further time can be given to the visa holder to undertake what was required of him or her.
24. In considering genuine effort, I had to consider the implications of section 134(2) and (3), as discussed in the paragraphs which follow.
EVIDENCE BEFORE THE TRIBUNAL
25. The evidence before the Tribunal comprised the documents produced pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (“the T- Documents”), together with supplementary T documents and the other documents, Exhibits A1 – A3 as tendered. Mr Koh also gave oral evidence at the hearing.
CONSIDERATIONS
26. In coming to the correct and preferable decision regarding whether the decision to cancel Mr Koh’s Business Skills visa should be affirmed, varied or set aside, I must take into account all the evidence, both written and oral, the submissions, case law and legislation.
27. I acknowledge the approach in cases which are relevant to the decision making process as follows: Freeman v Secretary, Department of Social Security (1988) 19 FCR 342, and in Re Griffiths and Migration Agents Registration Authority [2001] AATA 240 at paragraph 39, where Deputy President Forgie said:
Where the decision under consideration is a cancellation decision, the Tribunal must consider whether or not that decision was correctly made at the time it was made.
28. There is a line of Tribunal cases which have followed the above authorities, supporting the proposition that the Tribunal is limited to events at the date of the primary decision in cases of review of decisions cancelling Business Skills visas pursuant to section 134 of the Act.
29. I must therefore have regard to all relevant evidence to enable the making of findings of fact with respect to the Applicants’ situation at the date of cancellation. That means, in effect, that essentially the evidence of activities to be taken into account is that occurring up to the date of cancellation unless that evidence bears on the merits of the decision as at the time that it was required to be made.
30. I can also take into account future intentions, genuine efforts, and action taken beyond the date of cancellation and up to the date of hearing. Re Angkadjaja and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 699 and Re Lau and Minister for Immigration and Multicultural Affairs (2002) 35 AAR 395 and Re Harlim and Minister for Immigration and Multicultural Affairs [2002] AATA 767.
CONSIDERATIONS RELATING TO SECTION 134(2) OF THE ACT
whether mr koh has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia
31. In relation to genuine effort, in Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283, the Tribunal held at [53] that “the word “genuine” and the matters mentioned in s 134(3) show that there is a requirement of a level of effort beyond that which is purely superficial or token…” , and at [88], “However the Act does not specifically include any requirement that the “genuine effort” must be likely to succeed, or must meet any threshold level, beyond being genuine…” .
32. “Ownership interest” in Australia is defined under s 134(10) of the Act as follows:
“ownership interest , in relation to a business, means an interest in the business as:
(a) a shareholder in a company that carries on the business; or
(b) a partner in a partnership that carries on the business; or
(c) the sole proprietor of the business;
...”
33. It is well established that a business must be shown to be a commercial enterprise involving activities being pursued for the purpose of profit on a continuous and repetitive basis (Hope v Bathurst City Council (1980) 144 CLR 1). Mr Koh indicated in evidence that he had attempted to obtain an interest in Australian Companies that would meet this criteria.
34. In support of his argument that he had made a genuine effort to do what was required in section 134(2) of the Act, Mr Koh said that he had contacted a number of Australian companies seeking to make arrangements in respect of a joint venture or partnership. He tendered copies of seven letters written by him between 21 February 2005 and 25 October 2005 (A2) together with a brief business plan (A3). He met with one business and received three brief letters from SMB Harwal Electric Pty Ltd from 5 July 2005 to 21 November 2005 (A2).
35. Mr Koh also gave evidence about his very brief involvement with Greens in early 2006. Mr Koh told me that it was difficult to find an Australian partner for his business for a range of reasons and after his disappointment in relation to his original proposal he had attempted to change track and invest in Greens.
36. It seems clear that Mr Koh did not have a sufficient or eligible interest in a business in Australia when his Business Visa was cancelled, but in considering whether Mr Koh has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia, I find it difficult to accept that he has made that genuine effort. He did not state that he intends to continue to make genuine efforts. He told me about the business interests he has explored. I find that the research and attempts made were very superficial. He sent out some letters and had one meeting (other than in relation to the Greens venture).
37. He has made no other investments in Australia, and has not purchased real property. I cannot be satisfied that Mr Koh has satisfied what is required in regard to section 134(2)(b).
38. I must also explore whether Mr Koh intends to continue to make genuine efforts. There was no evidence that this would be the case. He still has business interests in Singapore and derives fees from these interests. The efforts made so far in Australia were minimal could be described as purely “superficial or token” (Yam and Minister for Immigration and Multicultural Affairs [2004] AATA 283 at [53]). These are described further in Paragraph 43 below.
39. I am not satisfied on the basis of the evidence before me that Mr Koh has made a genuine effort in terms of section 134(2) of the Act.
40. Accordingly, I am not satisfied that the Applicant has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia, and that he has made a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of an eligible business in Australia.
41. I next considered section 134(3) of the Act in relation to Mr Koh’s stated intention that he intends to continue to make efforts to continue in business in Australia.
CONSIDERATION OF SECTION 134(3) OF THE ACT AND GENUINE EFFORT
42. I was mindful that section 134(3) of the Act sets out some or all of the matters which can be taken into account when determining whether Mr Koh has made the “genuine efforts” referred to in section 134(2) of the Act. There are departmental guidelines which provide assistance as to whether a genuine effort has been made for statutory purposes. They are of course only guidelines, and are not binding on me, but they can be of assistance and I have considered them in addressing s 134(3) discussed below (Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577). Section 134(3) provides that:
Without limiting the generality of matters that the Minister may take into account in determining whether a person has made the genuine effort referred to in subsection (2), the Minister may take into account any or all of the following matters:
(a) business proposals that the person has developed;
(b) the existence of partners or joint venturers for the business proposals;
(c)research that the person has undertaken into the conduct of an eligible business in Australia;
(d)the period or periods during which the person has been present in Australia;
(e)the value of assets transferred to Australia by the person for use in obtaining an interest in an eligible business;
(f)the value of ownership interest in eligible businesses in Australia that are, or have been, held by the person;
(g) business activity that is, or has been, undertaken by the person;
(h)whether the person has failed to comply with a notice under section 137;
(i)if the person no longer holds a substantial ownership interest in a particular business or no longer utilises his or her skills in actively participating at a senior level of a day-to-day management of a business:
(i)the length of time that the person held the ownership interest or participated in the management (as the case requires); and
(ii)the reasons why the person no longer holds the interest or participates in the management (as the case requires).”
(a) business proposals that the person has developed
43. In relation to section 134(3)(a), Mr Koh submitted that he had prepared an initial business plan (part of his application), a later business plan (sent to SMB Harwal Electric (A3)) and a business plan for Greens. Each of these plans were very basic and could not really be described as plans or proposals.
(b) the existence of partners or joint venturers for the business proposals
44. I was satisfied that there were no partners or joint venturers to be considered in the context of this application.
(c) research that the person has undertaken into the conduct of an eligible business in Australia
45. It is questionable whether Mr Koh conducted any research in respect of eligible businesses other than identifying three electrical businesses in New South Wales. The only negotiation which seems to me to have progressed beyond the initial contact stage, was one meeting held with SMB Harwal Electric on 18 July 2005.
46. I was satisfied from the evidence that Mr Koh conducted only superficial research into the conduct of an eligible business in Australia.
(d) the period or periods during which the person has been present in Australia
47. Mr Koh arrived in Australia on 23 October 2004 and returned to Singapore in 2005 for a few months but has largely resided in Australia (other than making short holiday trips to Singapore). Mr Koh clearly loves Australia but has not established any roots in Australia. He has not given up his business in Singapore, and still owns a majority share in it, as previously, and receives income from that.
(e) the value of assets transferred to Australia by the person for use in obtaining an interest in an eligible business
48. Mr Koh has not transferred any assets to Australia. He has $300,000 in cash that can be transferred and still has a majority shareholding in the Singapore business.
(f) the value of ownership interest in eligible businesses in Australia that are, or have been, held by the person
49. The only investment that has been made was a temporary one that was made after the business survey had been sent and was for $50,000 in Greens. I accepted that he did not have an ownership interest in an eligible business at the relevant time.
(g) business activity that is, or has been, undertaken by the person
50. Any business activities in Australia conducted by Mr Koh consisted mainly of correspondence. I accepted the submissions of the Respondent to find that Mr Koh has not been involved in the management, even of the only investment he made, which was Greens.
(h) whether the person has failed to comply with a notice under section 137
51. Mr Koh failed to submit the required documentation to the Minister in the correct time frame. It appeared to me to have been submitted with a delay, but it was not clear whether an extension may have been sought. I do not give any weight to this factor.
CONCLUSION
52. As noted above, I am satisfied that Mr Koh does not meet the tests in section 134(3) of the Act in regard to genuine effort. I cannot find that he has made a “genuine effort” as envisaged under the Act. As discussed in detail in the paragraphs above, I am not satisfied that he meets the tests for the discretion to be exercised in relation to section 134(2) of the Act.
53. In Chen and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 1023, the Tribunal found that whilst visa cancellation would cause “disappointment and some distress”, it did not amount to extreme hardship.
54. I am sympathetic to Mr Koh’s feelings, and as I cannot find for him, it is likely he will suffer disappointment in the terms of the applicant in Chen .
CONSIDERATION OF THE RESIDUAL DISCRETION
55. I have found that Mr Koh does not satisfy the indicia for section 134(2) of the Act, in that I am not satisfied that he has made a genuine effort in the terms of the legislation. However, the Tribunal has a discretion not to exercise the power to cancel a business visa even if the criteria set out in the legislation are not satisfied. That discretion can be exercised in favour of Mr Koh if I am satisfied that further time should be given to him to undertake what was required of him.
56. In Karim and Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 56, DP Walker found in favour of an Applicant who failed to satisfy either sections 134(1) or 134(2). In so finding, the Deputy President gave weight to the fact that the Applicant had children in Australia who were permanent residents because this gave a strong incentive to the Applicant in that case to continue with the move to Australia and to bring his assets to this country (at [72] and [73]).
57. Mr Koh did not give evidence of any business assets that he intends to move to Australia and I note that he and his wife have a right of residence in Singapore. I find that Mr Koh, has had the benefit of his Business Visa since March 2004. It was only in 2006 that he made a small investment in Australia which he thought would satisfy the substantial ownership in an eligible business he had undertaken to make when he was granted the Business Visa. He has made no other investments since, and the evidence before me satisfied me that other inquiries he has made have been relatively superficial. As has been stated in cases such as Re Huang and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 656, Re Tang and Minister for Immigration and Multicultural Affairs [2000] AATA 997, and cited in Re Burg and Minister for Immigration and Citizenship [2007] AATA 1630, it is apparent that the Act is intended to benefit business owners who settle here and manage their Australian business.
58. A recent case where the discretion to provide more time for the Business Visa Applicant to satisfy the requirements of the legislation was exercised was in Re Badenhorst and Minister for Immigration and Multicultural Affairs [2006] AATA 742. The Tribunal in that case was satisfied that the Applicant had made a genuine effort and that his efforts were beyond what might be described as purely superficial or token. However, in this case I did not find that Mr Koh’s efforts could be categorised as a “genuine effort”.
59. In this regard I should also add that Mr Koh was very truthful with the Tribunal – he did not attempt to exaggerate or overstate the efforts made and he presented as an honest hardworking man. It is also clear that his skills are in demand within Australia. He and his wife are making a positive contribution to the Australian society, pay taxes and want to contribute their skills and efforts. Mr Koh’s invoices suggest that he is a skilled and competent worker and this decision should not be regarded as any smudge upon his character or his specialised skill set. Rather, this decision is a reflection of the business establishment, set up requirements under the particular class of visa and the legislation that was considered in this case.
DECISION
60. The Tribunal affirms the decision under review. As a consequence Mrs Koh’s visa is also cancelled. The Tribunal refers the matter back to the Minister for the appropriate action to be taken.
I certify that the 60 preceding paragraphs are a true copy of the reasons for the decision herein of Professor T Sourdin, Member
Signed: …………………[Sgd]……………………
Ms R Prasad (Associate)Dates of Hearing: 18 July and 18 August 2008
Date of Decision:18 August 2008
Date of Written reasons: 19 August 2008
Appearance for the Applicant: Self-represented
Solicitor for the Respondent: Ms Linacre, Clayton Utz
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