JERUSALEM (VINnews) — Qatar’s sovereign wealth fund, the third-largest shareholder in German automaker Volkswagen, is reportedly putting hundreds of additional jobs at the company’s German plants at risk. According to a report in the German newspaper Bild, Qatari representatives have vetoed an agreement for an alternative use of Volkswagen’s struggling plant in Osnabrück. The potential partner in the deal was Israeli defense company Rafael.

Initially, it appeared that a solution had been found to save the factory. At the end of April, Volkswagen signed a letter of intent with Rafael, which planned to manufacture components for the Iron Dome missile defense system at the plant. However, Volkswagen’s Qatari shareholders have now reportedly objected to the agreement due to the strained relations between Qatar and Israel.

The Qatar Investment Authority (QIA), the state-owned sovereign wealth fund, holds 17% of Volkswagen’s voting rights and 10.4% of the company’s total share capital, giving it significant influence over decisions made at Volkswagen’s headquarters in Wolfsburg.

Mohammed Saif Al-Sowaidi, CEO of the Qatar Investment Authority, along with two former Qatari government ministers, serves on Volkswagen’s supervisory board.

Qatar, which for years has been regarded as a major financial supporter of Hamas in Gaza, reportedly opposes an agreement to manufacture weapons components intended solely for Israel’s defense against rocket attacks.

Security expert Peter R. Neumann of King’s College London warned in an interview with Bild that while investment from Gulf states is welcome, “the same principle applies here as elsewhere: we must not become dependent on any one country.”

Neumann added that Germany should adopt “a more pragmatic approach” toward the region. Since Germany’s economy began slowing, Gulf states have sought to expand their strategic influence in the country.