Austrian investigators studying the complicated financial deals of Bermuda resident Mr. Wolfgang Flottl and his Bermuda companies have completed preliminary reports at the embattled Bawag bank.

But after weeks of inquiry amid complaints of a lack of cooperation from officials in the Bank fur Arbeit und Wirtschaft (Bawag), there are still more questions than answers.

Not yet satisfied, investigators have vowed to probe even deeper in the coming weeks.

The Austrian press is reporting that international banks have begun to distance themselves by cutting vital credit lines with the banking institution that houses significant assets of Austrian trade unions.

And yesterday, The Financial Times reported that one US bank, Bankers Trust, removed a $100 million line of credit from the $19-billion bank, the third largest in Austria, because they were not comfortable with the bank's dealings with a Bermuda-based hedge fund operation being run by Mr. Flottl.

The London business publication quoted Mr. Tom Parisi from Bankers Trust as saying, "we felt that the credit profile of the bank had been adversely affected by this exposure to the hedge fund.'' Mr. Parisi pointed out that the executive committee of the Bawag was not fully informed of the loans and it seemed that a large part of Bawag's earnings were coming from the venture.

He added, "We just didn't like the smell of it.'' Mr. Flottl is the owner of Bermuda-based Ross Capital Markets Ltd. through his Belforte Group Holdings Limited. Investigators in Vienna from the Ministry of Financial Affairs and a second regulatory body, the Austrian National Bank, the country's central bank the OeNB, have questions regarding the role of his father, Mr. Walter Flottl.

They are concerned that Mr. Flottl, a chairman of the bank, arranged secret deals with his son to move $2 billion (or more than 10 percent of the bank's balance sheet) from the Bawag bank to offshore investment companies controlled by his son.

The arrangement had lasted for some six years with the money being returned since the scandal first surfaced.

But it now appears, say the FT, that the rise of prominence of the Bawag, which doubled its total assets in the last 10 years, has come from the offshore activity, which the bank admits accounted for up to a third of their profits.

The glossy magazine News and its competition Wirtschaftswoche have been investing major resources into following the widening scandal. The emerging facts are good reasons why.

A chairman of the bureau for bank control and regulation, Mr. Anton Stanzel, the man who is overseeing at least one of the investigations into the affair, actually sat on the Bawag bank's board until December. Questions are now being posed by Austrians as to how he missed these transactions. How much did he know, and when? A Wirtschaftswoche (BusinessWeek) article talks of allegations that Mr. Walter Flottl did not report correctly the facts surrounding the controversial transactions.

Under the headline "Impossible to Understand'', Austrians are today reading that the investigators are not sure that the money flowed only through 26 companies controlled by the bank chairman's son, Wolfgang.

They wonder if Bermuda-based Ross Capital Markets Ltd. and European Bank and Trust Limited of Nassau, again two companies controlled by the son, together with Bear Stearns, the largest bond trader in the world, were conduits for money returning to the Bawag bank through Deutsche Bank of Frankfurt and the Chemical Bank of New York.

The money was reportedly arriving in sums of up to $250 million to separate loan accounts at the Vienna bank. But they say that the money was not just being used to pay back the loan credits.

In fact, investigators could find no paper trail relating to huge sums of money and were told by bank authorities that for certain transactions there had been no written credit contract. They admitted that it was impossible for them to find out the circumstances under which credit was given.

But while the Austrian BusinessWeek appeared happy with investigators saying that the depositors' money in the bank was safe and liquidity assured, they outlined five other banks whom the Bawag failed to tell they had cut their credit lines.

Banks use credit lines, or interbank lines, to deal with each other in this electronic age. Already there are moves afoot that could eventually isolate the Bawag bank.

The American banks Republic National Bank and Bankers Trust out of New York; French banks Credit Lyonnais and Paribas; and the German Commerzbank and BHF have all cut their normal bank ties with the Bawag.

When investigators first began their probe, they advised the Bawag bank authorities that they should be apprised of any moves that could include other banks taking action against them. Still the regulators had to find out independently that the six banks had moved against the Vienna bank.

Here in Bermuda, the managing director of Ross Capital Markets Ltd., Mr.

Edward Joseph Dalidowicz, denied there was any truth to the rumour that the company was laying off staff at the Clarendon House office.

But faced with intense media scrutiny and pressure to pump back billions of dollars to the Bawag bank, Mr. Flottl no doubt himself has heard rumours that he was strapped for cash and refusing to proceed with multi-million dollar improvements to his exclusive Tuckers Town property and the Seon Place office block with his partner Premier Sir John Swan.

But Mr. Leon Simmons, President of Challenger Banks Limited, the management company overseeing the scheme, has denied that there is any difficulty with the office block project that stretches from the eastern edge of Front Street to Reid Street extension, just above Spurling Hill.