The Government yesterday said the number of business insolvencies unexpectedly dropped 1.5 per cent in the year to March 31 compared with the previous year, despite the onset of the Asian economic crisis. The Official Receiver's Office said the number of new court insolvencies fell to 1,102 in 1997-98 from 1,119 in 1996-97. The Official Receiver, Robin Hearder, said the decrease in insolvency cases was due to strong economic conditions prevailing in the first part of the year. He said the effects of the later slowdown had not yet been felt as there was typically a time lag between business failures and the launch of insolvency proceedings. Mr Hearder said 459 compulsory company liquidations took place during the year, against 557 the year before. The leading causes of liquidations were a drop in business, cash-flow problems, and high operating costs. The number of new bankruptcies increased to 643 from 562. The businesses most prone to insolvency during the year included garment and knitting manufacturing, restaurants, importers and exporters, construction and engineering firms, and property developers. During the year, 73 bankrupts or directors were convicted of insolvency offences, up from 64. The amount of fines imposed by the court fell marginally to $210,687 from $212,595 in 1996-97. Forty-four orders for disqualification of company directors were made by the court in the year, up from 27 the year before. Twelve arrest warrants were issued against unco-operative bankrupts or directors, and five warrants were implemented.