A notorious East Timorese-born gang leader who's believed to have strong links to Indonesia's military, business and criminal communities has returned to Dili, sparking heated row between the two countries.

Hercules Rozario Marcal is controversial because his gang served as enforcers for the Suharto regime, intimidating East Timorese independence activists. He arrived quite openly at Dili international airport last week. Major General Lere Anan Timur said Hercules had no role in modern East Timor and only symbolised a return to the country's brutal past. The army chief threatened to arrest Hercules, who is now an Indonesian citizen. That drew a rebuke from Indonesia, where members of Parliament warned Dili against arbitrarily arresting Hercules.

Presenter: Liam Cochrane

Speakers: James Scambary, expert on gangs and urban violence in East Timor, based at Swinburne University's Institute for Social Research

Scambary: Hercules was the Kompassus commanders that's Prabowo Subianto's right hand man in East Timor in the early 1980's. People don't know a lot about what he did, but most, the general belief is that he was responsible for coordinating the underworld networks against the independence movement. So there was a whole range of different sort of militias and paramilitaries and it's generally believed that his job was to try and organise some of these groups.

And in around about 1986, he was then sent to Jakarta and he was installed by the military in Tanah Abang, in Jakarta, in protection, prostitution and gambling rackets and he's probably the most famous gangster as a result of that in Indonesia. You can, in fact, ask any taxi driver anywhere, they'll know about him.

Cochrane: What about his role in terms of the independence struggle of East Timor?

Scambary: All we really know is that he had links to the underworld and in Indonesia, he apparently organised for the counter-demonstrations, the students' resistance movement were organising these impromptu pro-independence rally, so he would organise counter-demonstrations by sort of so-called Timorese, pro-Indonesian Timorese, and he also kept track of them [pro-independence protesters].

But on the other hand, apparently, I've spoken to some Timorese that actually lived in his house in Jakarta, and they actually said that he also sometimes protected them. But he's also believed to have – on behalf of Pemuda Pancamarga – he's accused of organising some of the 1999 violence, the post-referendum violence.

I don't think he's necessarily pro-autonomy or has any views himself. I think he's an apolitical gangster, but he's certainly been linked to the anti-independence movement and to certainly very closely linked to the Indonesian military.

Cochrane: Now, let's move to the recent controversy around Hercules. He visited Dili, arrived quite openly at Dili airport. Tell us about the reaction from East Timor's army chief to the visit from Hercules?

Scambary: He certainly does raise alarm bells and yes, the current head of the army has said that Hercules represents pro-autonomy interests, that he wants to bring back people from West Timor from Atambua particular, back to East Timor and he's on the record to being opposed to he said has caused conflict and says that they can't reclaim their land and he thinks that Hercules is linked to this move.

He's also very upset with the celebrity-status given him, that was apparently quite a reception for him when he arrived, and he also has accused him of actually bringing a gun through the airport.

I suspect that he's quite well informed. It's not a near rumour, but certainly – having been through the airport a few times – it wouldn't be that hard [to smuggle in a weapon] with the x-ray machines constantly on the blink. But that was essentially the essence of his reaction and I think there's certainly is support for that stance within East Timor.

cochrane: Now there has been a reaction from Indonesia. Tell us what the Indonesian parliament, members of the Indonesian parliament have said about the comments from East Timor's army chief?

scambary: Well, their reaction has been to say well, because you can't threaten to arrest somebody. He hasn't actually committed a crime. So he's an Indonesian citizen and so there's been this sort of outrage. But he certainly committed crimes within Indonesia. He was arrested in I think in 2008 for organising an assault, somebody, a businessman was beaten up by Hercules' group and he spent I think three or four months in prison. So he's no ordinary citizen and there are people who are saying he shouldn't have any pick in any business or he shouldn't even be allowed into the country because of link to the crimes of '99.