The Commercial IBT Labuan branch claimed that it had severed ties with its offshore parent bank in Australia - which was mysteriously drained of RM5 billion - before the Melbourne-based bank wound up on Nov 12.

Branch manager Sally Foo said yesterday that the bank which was set-up early last year had no longer 'any contact' with the liquidated Australian CIBT. However she could not provide a specific date as to when the ties were cut.

"I cannot comment on anything accept to say that there is no longer a link between us and our former parent bank," she added when contacted.

CIBT Labuan's website however still shows that the branch is linked as a licenced offshore bank branch to the now-defunct Australian CIBT.

Mysterious activities

Australian investigators said that CIBT's true activities remain a mystery but liquidators have traced a CIBT bank account in Malaysia which has a credit balance of about RM40,000. This has since been frozen and it cannot be ascertained if the investigators were referring to CIBT Labuan.

On Dec 6, Australian newspapers carried reports that local regulators were stumped by the sudden huge withdrawal leaving only RM150 in the bank, the dispersing of the bank's shareholders and the fact that some of the company's shareholders' names were that of the same person.

According to Australian liquidators, a Malaysian based in Melbourne, Dr Adrian Chee Beng Ong, had his name registered more than once in the bank's directorship.

The directors have also been alleged to have used fake addresses and Chee told Australian newspapers that it was for "security reasons" and that he and CIBT were "victims of a political campaign".

Liquidator Michael Scales was reported to have said that "my staff found Dr Ong vague and non-specific when discussing the assets of the company".

In February this year, the Australian banking regulators launched a probe on CIBT on alleged breaches of the Crimes and Corporations Acts and raided the company's premises. Six months later, Australia's Victorian Supreme Court appointed provisional liquidators.

Liquidators discovered that three days earlier, CIBT's RM4.4 billion in ordinary shares and RM1.13 billion in cash were transferred to another entity, Commercial IBT Ltd with both the new entity and funds now untraceable.

They added that CIBT's directors have quit and its name changed to Kantoch Pty Ltd.
Political hand

The bank came under investigation from the Australian Securities and Investment Commission after Malaysian regulators contacted their Australian counterparts with their concerns early this year.

Malaysian regulators were alerted when PAS' former parliamentarian Husam Musa raised questions on CIBT in Parliament and urged Bank Negara to investigate the company last year.

However, the Finance Ministry's parliamentary secretary, speaking on behalf of former prime minister and then finance minister, Dr Mahathir Mohamad, stated that the Labuan Offshore Financial Service Authority had investigated the company before issuing the licence.

It has been alleged, by certain quarters, that Ong was acting as a front for key politicians in Malaysia.

CIBT's renegade directors have claimed that they were subjected to "threats, extortion and terrorism" from a group in Malaysia and Australia but have refused to divulge names.

Contacted yesterday, Husam said it was now "obvious that there are politicians connected to the bank as it is impossible for the Malaysian government not to have known" of the banks dealings and background.

"At that time, when the government defended their decision (to grant the Labuan branch its licence) in parliament, they must have known that the parent company was not a legitimate bank," he claimed.

He added that Malaysia has stringent laws when approving local branches for foreign banks and is puzzled how the Finance Ministry had allowed the application.

"However, even until now, the government has not revoked its approval of the bank's licence and not closed the bank down," he said unconvinced that ties between the two entities have been severed.

When the branch was approved, Husam was told in parliament that, CIBT Labuan had over RM13 billion in deposits and assets.

"That is a big amount of money. The bank could be deemed as being involved in money laundering if it's not properly investigated and clarified by the government," he said urging present parliamentarians to raise the issue in the House.