EVERTECH, once one of Hongkong's biggest computer companies, has gone into provisional liquidation after shareholders - including China Assets Management - refused to sink further funds into the struggling firm. China Assets announced on April 26 that it had been forced to make provisions of $46.8 million against losses made by an electrical firm in China, but did not name the company. Mr John Lees and Mr Morgan Chubb, of Ferrier Hodgeson and Marfan, were appointed as provisional liquidators this week, and are investigating the reasons for the group's insolvency. Mr Lees said: ''The company is insolvent and we were brought in at the request of the shareholders and creditors. ''We are investigating why it went down. It had been happening for a while. They got an injection of capital from shareholders in November. Quite a lot of new money was put into the company, but it got to the stage where shareholders were not prepared toput any more in.'' Preliminary findings point to cash-flow problems, exacerbated by computer price wars and a tightening of credit lines by banks lending to the industry. Evertech has factories in Hongkong, Shenzhen and Malaysia. Its offices and research departments are based in Kwun Tong. About 70 people were employed in Hongkong and 300 at the Shenzhen factory. Ferrier Hodgeson has teams working in Hongkong and Shenzhen, but has yet to start enquiries in Malaysia. China Assets Management is a Hongkong company owned 51 per cent by China Venturetechno International. Standard Chartered Asia has 10 per cent and Wardley James Capel 10 per cent. It was set up a year ago with a remit to invest in China projects and help them expand, with the aim of taking them public. Its investment in Evertech was about 7.7 per cent of its net asset value before the provisions were made. It has a net asset value of just over US$71 million, and will only invest a maximum of 20 per cent of that on any one project. It is currently investing in seven projects and US$3 million worth of B shares. Managing director William Tsui King-fai said: ''A lot of people think China investments are risky. But within Chinese entities less can go wrong, because there is no incentive to do anything funny. ''There is no profit-sharing or commission like salesmen receive in Hongkong, where they can collect a bonus and then change jobs. In China people are not going to change jobs so easily, so the risk element for China investments is reduced. ''We treat Evertech as an isolated case, and not indicative of the China situation.'' He added that Evertech was China Assets' only unprofitable investment and the only one not managed out of China. Evertech is run by Hongkong Chinese. The chief executive is Mr Henry Loo Hon-hung. Mr Lees said part of the company's demise was due to funds swallowed up by two new products, which are still on the shelf: a fax-cum-computer and an educational software package. Neither is ready to be marketed. Shareholders and creditors are likely to be disappointed at the pickings retrieved by the provisional liquidators, although in China Assets case - where full provisions have been made - any returns are a plus.