reports alleging his father, Mr. Walter Flottl, the chief executive of an Austrian bank, authorised huge loans to offshore companies that are under the control of his son.

And yesterday, the senior Mr. Flottl said that his bank Austrian Trade Union Bank Bawag, would close out the controversial debt market positions which were never detailed in the bank's accounts.

Last week, Reuters News Agency reported Austria's Trade Union Bank chief had been summoned to see banking supervisors this week Wednesday, amid claims that he had involved the bank in debt speculation via offshore firms run by his Dr.

Flottl, 38, a business partner with Premier the Hon. Sir John Swan.

Mr. Walter Flottl, 70, chief executive of Bank Fuer Arbeit Und Wirtschaft Ag (Bawag) first came under fire when the business magazine, Wirtschaftswoche, alleged that he had approved the 16 billion Austrian Schillings ($1.3 billion) loans to 26 letterbox firms.

The lending was unexplained in Bawag's 1993 accounts, which listed 16 billion schillings in receivables under seven Isle of Man "special purpose investment companies''.

The bank chief was quoted by Reuters yesterday as saying: "The credit business will be closed quite quickly -- by the end of May at the latest.'' Dr. Flottl's Bermuda-based Ross Capital Markets, according to Reuters, was rumoured to have been a big seller on European bond markets last week. The secretive Dr. Flottl, who is considered to be a multi-millionaire, also owns International Asset Management Ltd.

Banking supervisors will continue their investigations after reviewing an interim report, but found no grounds to act against the bank, Reuters said.

The senior Mr. Flottl said Bawag's supervisory board would discuss the offshore business at a "routine meeting'' on May 6. There was no comment on the extent of Bawag's engagement in offshore markets, although it was said the business had been profitable.

Mr. Flottl said: "We will withdraw completely, even though this means we will in future miss out on earnings...because as a result of the unbelievable press campaign agaisnt us, questions are being asked from abroad.'' Wirtschaftswoche magazine has alleged that the bank chief had approved the loans to the 26 companies controlled by Dr. Flottl.

Dr. Flottl is a business partner of the Premier in Seon Place Ltd., developing an office building at the eastern end of Front Street intended for his company's business.

The reclusive financier also purchased luxury home Castle Point, in Tucker's Town, for an estimated $15-23 million.