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Prime Minister Xanana Gusmao signed-off on a multi-million dollar Government contract to a company in which his daughter was a major shareholder.
The ABC can confirm Zenilda Gusmao is listed as a Prima Food shareholder in East Timor's 2008 business registry.
Last year, Prima Food won a Government contract to supply rice worth $US3.5 million ($4.3 million).
President Jose Ramos-Horta says it is not his business to intervene.
"In our political system, the President does not have executive authority. I cannot everyday interfere in the running of the country," he said.
"If that's what I want to do, I might as well run for Prime Minister. That is the responsibility of the Prime Minister."
The Prime Minister Xanana Gusmao is unavailable for comment.
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Artwork by Arte Moris artist - Portrait of East Timorese President Jose Ramos-Horta.
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