Swiss-based parent company which owns the plush St. George's Club timeshare units.

They are acting after a complaint was made about money the financially troubled York Hannover property group owes to investors.

"A complaint was made recently and we are at the very beginning of our inquiries,'' a Police spokesman said last night. "It is far too early to say one way or the other if there is any substance to it or if there has been any wrongdoing.'' There is no suggestion of impropriety about the current management of the St.

George's Club itself or about the way it is run.

The complaint is believed to have its origins several years ago -- before the current management became involved.

Mr. Karsten von Wersebe, the German-Canadian businessman who controls the York Hannover group, could not be reached for comment yesterday. The group's staff are not aware of his daily movements and say he is virtually impossible to track down. Telephone lines at the Lucerne-based holding company were recently disconnected.

None of the York Hannover hierarchy, who are based in Switzerland and Toronto, have returned any of the many messages The Royal Gazette has left for them.

The Police inquiry is the latest of several blows to hit the troubled York Hannover group, which owns a number of companies all around the world.

The multi-million dollar conglomerate is also at the centre of a banking scandal involving the Rothschild Bank of Zurich. RBZ allegedly made loans to the York Hannover group above the level permitted to a single client by the Swiss Banking Commission.

It was also disclosed yesterday that Bermuda resident Mr. Arthur White has filed a court petition in Switzerland seeking the winding up of the group's parent company, York Hannover Holding AG.

If successful, his action could lead to the collapse of York Hannover companies all around the world.

The group is known to have two firms in Bermuda and others in Switzerland, Germany, the Netherlands Antilles, Canada and the US.

Property developer York Hannover Developments in Canada, whose `parent' is thought to be Mr. von Wersebe himself, and not York Hannover Holding AG, is currently in receivership.

The group's corporate structure is extremely complicated and there could be more subsidiaries, as yet unheard of.

Mr. White, who lives at Mizzentop, Warwick, was one of the original investors in the St. George's Club and claims he is still owed C$750,000.

It is the balance of a loan of approximately C$2.5 million he made to the group in 1981 and which was due to have been repaid in full in 1987.

When the full sum was not forthcoming, Mr. White said he agreed to accept a promissory note from the firm for the balance.

At the time the note was due to be paid in full, on July 1, 1992, the company owed him C$750,000, he said.

Despite repeated requests for the money, he said the sum has still not been repaid. "I even confronted Mr. von Wersebe by telephone a few months ago but did not get anywhere,'' he said.

As a last resort, Mr. White went to Switzerland and instigated legal proceedings there.

He said a court in Lucerne had ruled that the company did owe him C$750,000 but the firm had appealed.

He filed a writ in Zurich on August 18 to wind up York Hannover Holding AG but the case has been adjourned until after the Lucerne appeal hearing is held in a few weeks time.

Mr. White said he had given the group every chance to repay his loan and added that his patience had run out.

"I have no idea what's happened to my money,'' he said. "I have been treated terribly by the firm.

"I invested in this company in good faith and, in return, I've had nothing but problems. They've made absolutely no attempt to deal with me properly.'' Mr. White, a Canadian, became a multi-millionaire from selling hotels he owned in the Niagara Falls area and retired to Bermuda more than a decade ago.

He added: "What makes all this worse is that I recommended to my friends that they should also invest in the St. George's Club and some did put their money into the project.

"One of these friends has now started separate legal action against the company in Switzerland.'' He said the group owes approximately US$5 million to the original private investors whose money helped get the timeshare development off the ground.

He could not understand how the St. George's Club could continue to take in money from sales and still York Hannover served with writ not pay off its lenders on time, he said. "Where's it going?'' he asked. He also wanted to know why the St. George's Club had $79 million of debt on the building of 65 units. "It appears excessive,'' he said.

The York Hannover group has two companies based in Bermuda -- York Hannover (Bermuda), which is an investment firm, and York Hannover (St. George's), which owns the St. George's Club.

Mr. White this week filed a writ at Bermuda Supreme Court to wind up York Hannover (Bermuda) Ltd., which is the company he lent his money to.

Last night, management of the St. George's Club sought to distance themselves from the Police investigation.

Mr. Alan Marlow, the club's general manager, said he only became involved with the project two years ago and was not involved in its financing.

"I'm not aware of any Police inquiry at all,'' he said. "This has come as a complete surprise.'' Mr. Marlow's company, US-based Midlan International, runs the project on a management contract.

Florida-based Mr. Dan Kramer, the executive vice president of York Hannover (St. George's) Ltd., also said yesterday he was unaware of a Police investigation in Bermuda.

Mr. Kramer, who has been with the York Hannover group for about five years, said: "This is news to me.'' On the St. George's Club's huge debts, he said: "There has been continual investment from the parent company since the beginning of the project in 1980/81. The sum can grow quite quickly with accrued and capitalised interest.'' All but $9 million of the debt is internal. "The parent has never asked us to service it,'' said Mr. Kramer.

"We have a business plan which should lead to the debt eventually being repaid in full.'' On moves to wind up the whole group, he said he wanted to make it clear that the St. George's Club was profitable and he was confident it would be taken on as a going concern if "the worst came to the worst''.