Lisbon under pressure over RI investment

Lisbon under pressure over RI investment

LISBON (Reuter): The Portuguese government was under pressure on Tuesday from East Timor resistance groups to block a planned transfer of a German-owned textile firm in Portugal to a joint venture under Indonesian control.

But it was not clear what, if anything, Portugal would or could do about the proposed switch of ownership.

Lisbon, which has no commercial or diplomatic links with Indonesia, was put on the spot by an announcement last week that German chemicals giant Hoechst AG was setting up a joint venture with Multikarska Investment of Jakarta.

The venture, in which the Indonesians would have majority control, would include a plant in Porto Alegre, eastern Portugal, where Hoechst produces textiles.

Portugal is the international spokesman for anti-Indonesian groups in East Timor, which Jakarta integrated in 1976, a year after the Portuguese left its former colony.

"If Portugal allows this precedent...then it will not be able to prevent other such initiatives in the future," said Mari Alkatiri of the National Council for the Maubere Resistence, a Lisbon-based East Timorese group.

But the Portuguese Foreign Ministry issued a statement on Tuesday saying merely that it was seeking further information about the deal from the German-Portuguese chamber of commerce.

But a spokesman for Hoechst Fibras, the Portuguese subsidiary, had no doubts about the importance of the joint venture for the local company and its 242 employees.

Noting that the Portuguese concern was just one of a number of European companies involved in the venture, Jose Macedo said there was no alternative to the link-up.

"If for any reason the Portuguese government stopped it (the deal), what is it going to do. Run the company, look for markets for it," he said.

Hoechst announced on August 12 that it was transferring its European textile business, which has plants in Germany and Denmark as well as Portugal, to the new venture in which Multikarska would hold a 60 percent stake.