So... after some struggling here we are

Code:

---

//////////////////////////////
// Set working directory
// lite-C 7.06.1 
//	by rstralberg
//////////////////////////////

//	GameStudio
#include <acknex.h>

//	Windows and StdLib stuff
#include <windows.h>
#include <stdio.h>
#define MAX_PATH 260 	

//////////////////////////////
// Get executable directory
//////////////////////////////
char* GetExeDir(void)
{
	char  exeDir[MAX_PATH] ; 		
	
	GetModuleFileName( GetModuleHandle(0), exeDir, (MAX_PATH-1) ) ;  
	
	int index = strlen(exeDir)-1 ; 
	while( index-- > 0 )  
	{
		if( exeDir[index] == '\\' )
		{
			exeDir[index] = '\0' ;
			break ;
		}
	} 
	return exeDir ;
}

//////////////////////////////
// Get current directory
//////////////////////////////
char* GetCurDir(void)
{
	char curDir[MAX_PATH] ; 		

	_getcwd( curDir, (MAX_PATH-1) ) ;	
	return curDir ;
}

//////////////////////////////
// Set current directory
//////////////////////////////
void SetCurDir( const char* pstrDir )
{
	_chdir( pstrDir ) ;
}


//////////////////////////////
// MAIN PROGRAM ENTRY
//////////////////////////////
	
function main()
{
	char dir[MAX_PATH] ; 		

	// switch dir to executable directory
	strcpy( dir, GetExeDir() ) ;
	SetCurDir( dir ) ;
	
	// write a file there just to verify where we are
	strcpy( dir, GetCurDir() ) ;
	printf( "We are now in directory %s. Writing 'Hello' to text.txt there\n", dir ) ;
	FILE* fp = fopen( "test.txt", "wt"  ) ;
	if( fp )
	{
		fputs( "Hello", fp ) ;
		fclose(fp) ;
	}

}

---

This testcode switches to the executable directory,
then writes a file test.txt there.