East Timor PM defends rice contracts

Stephanie March and Steve Holland

Last Updated: Wed, 15 Jul 2009 21:09:00 +1000

East Timor's Prime Minister, Xanana Gusmao, has defended his role in authorising a multi-million dollar contract for a company part-owned by his daughter.

Prima Food last year received a contract worth $US3.5 million to import rice into East Timor.

Radio Australia has previously revealed Zenilda Gusmao has a stake in Prima Food.

East Timor's Opposition Fretilin Party has called the situation a case of nepotism and corruption, and is calling for the prime minister to resign.

Investigation

Now, after weeks of silence on the matter, Mr Gusmao says he will face an investigation by East Timor's recently established anti-corruption commission.

"I don't want to explain any more, I don't want to explain any more. The anti-corruption commission can dig, and will dig, including into what happened in the past. Then we will see," he said.

Prima Food was one of 17 companies awarded government contracts to import rice to East Timor. Together, the contracts were worth US$56 million. Several of the contracts were awarded to companies linked to the wife of another minister.

"In the law, it states that the wife, or husband, and children, and also others, can only have a 10 per cent share. They are not allowed over 10 per cent. If there is proof that the share is more than 10 percent, then declare that I did wrong, it means I'm wrong," Mr Gusmao said.

Radio Australia has obtained documents that indicate Zenilda Gusmao secured an 11.1 per cent stake in Prima Food.

"Ricegate"

Government ministers have stood by the Prime Minister and recently restated their support in an official press release entitled "Ricegate".

Arsenio Bano, the deputy leader of the opposition Fretilin party, says he's concerned by the use of the term "Ricegate" - a play on words referring to the United States' "Watergate" political scandal. He says it suggests the government knows it has done wrong.

"I don't know if they realise what they are saying about 'Ricegate.' For me, it's really a scandal, and the government says the same thing. I don't know where this country will end up with this kind of situation," he said.

Despite the Prime Minister's willingness to face the anti-corruption commission, Mr Bano is continuing his call for him to step down.

The anti-corruption commission has yet to be properly set up and there is no deadline for when it might release its findings.