A Hong Kong ferry and a pleasure boat collided Monday night, killing at least 38 people and injuring more than 100 in what the BBC described as one of the territory's worst maritime accidents in decades.
Seven crew members have been arrested for alleged negligence, the Associated Press reported.
The pleasure boat had been booked by utility company HK Electric for around 120 staff and their families to see a fireworks display on Victoria Harbour, part of China's National Day celebrations, according to Bloomberg.
Local news reports said the boat was hit by a ferry operated by the Hong Kong and Kowloon Ferry company near Lamma Island, off the southwestern coast of Hong Kong Island.
"Five minutes after the boat departed, another vessel crashed into the middle of our boat and left without regard to the consequences," Bloomberg quoted Yuen Sui-see, HK Electric’s director of operations, as saying in a statement.
Three crew from each of the vessels were later taken into police custody, accused of not taking sufficient safety precautions. Police said there could be further arrests.
Survivors described scenes of chaos. A report in Australia's Herald Sun newspaper cited survivors as saying the boat started sinking rapidly after the collision. Photos from the scene showed only its bow protruding from the water.
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Although 28 boats and two helicopters were involved in the rescue operation, passengers were forced to swim ashore to Lamma Island — the third largest island in the Chinese territory and popular with expatriates as a getaway from the hustle and bustle of Hong Kong.
They were then taken by boat to Hong Kong island, about a mile away, and raced to the hospital by ambulance.
"I swam for a long time to reach the surface and swallowed a lot of water. Then I found a rescue boat," one woman said.
"I suddenly found myself deep under the sea. I swam hard and tried to grab a life buoy. I don't know where my two kids are," said an unnamed man.
By Tuesday afternoon, local time, 37 bodies had been recovered. Five of the dead were children, the BBC said.
A total of 101 people were hospitalized, and four remain in serious or critical condition, Xinhua reported.
The Fire Service Department said the search for survivors and bodies was continuing, according to Agence France-Presse. It is not known how many people are still missing.