Accountancy firm Deloitte Touche Tohmatsu predicts that a growing number of mainland-backed companies in Hong Kong will be liquidated amid the continuing credit crunch. Its comments were made after partner Dermot Agnew and Joseph K.C. Lo were appointed this week as the provisional liquidators of two Hong Kong construction and property companies controlled by the Fujian provincial government. Deloitte corporate restructuring and insolvency services manager Derek Lai Kar-yan said: 'As the mainland has gradually accepted the idea of liquidation, I'd believe there will be more and more cases of mainland-backed companies placed under liquidation.' The firm has already taken on an increasing number of jobs involved in liquidation, debt and corporate restructuring this year. Mr Lai said the first creditors' meeting for the failed Hop Kin Engineering Development and its wholly owned China Fujian Engineering (Hong Kong) would be held before December 14. Preliminary figures about the firms' assets and liabilities were not yet available but it is understood that most of the debt was pledged with collateral. The creditors included about 100 members of staff, as well as banks, finance companies and sub-contractors, Mr Lai said. The two firms were owned by the China Fujian Co-operation for International Techno-Economic Corp, which is controlled by the provincial government. An official at the parent company refused to comment on its fate. He said it was unlikely that the provincial government would bail it out under Beijing's policy to sever the links between government and business. 'Look at the closure of Guangdong International Trust and Investment Corp [Gitic] and you'll expect our company will be left to save itself,' he said. Gitic's two Hong Kong subsidiaries were put under liquidation last month, following the collapse of its parent.
