Hong Kong police have arrested seven crew members from two passenger boats that collided in the city's Victoria Harbor, killing 38 passengers.
Police officials say the crew members were detained on suspicion of endangering the lives of the passengers, but gave few other details on Hong Kong's worst maritime accident in decades. More than 100 people were injured.
Chinese President Hu Jintao and Prime Minister Wen Jiabao expressed their condolences to the families of the victims.
A ferry belonging to the Hong Kong Electric Power Company sank within minutes of colliding with another passenger boat late Monday. The ferry was carrying around 120 company employees and family members to watch a holiday fireworks show.
It is not known what caused the accident, since conditions were clear at the time and public transportation is generally safe in Hong Kong. Authorities are investigating the incident.
Hong Kong Electric Director Yuen Sui-see said the crash was not because of overcrowded conditions or lax safety standards.
"Our ship's license was granted recently, so this is not an issue about inspection. I hope everyone understands that we were directly crashed into," said Yuen. "This is equivalent to a car colliding straight into you and when this happens, whether or not the car has undergone inspections earlier, is a completely different issue."
Hong Kong Electric said it will pay $25,800 to the families of each of the deceased.
The other boat, owned by Hong Kong and Kowloon Ferry Holdings, suffered a damaged hull, but made it safely to shore with several of its crew and passengers taken to the hospital for minor injuries.
The accident happened near Lamma Island, Hong Kong's third-largest island, over a long holiday weekend to celebrate China's National Day and a mid-autumn festival.