However, at the worst of times, when these businesses go bust, creditors find themselves scrambling for information about how to get their money back and trying to identify the remaining assets of the failed companies which might be going walkabout.

Those doing business with companies they regard as suspect also require the means to do some rudimentary checking to discover whether they are likely to face problems recovering their money. Such checking could well avoid some of the traumas associated with being caught up in a liquidation.

Fortunately, company failures are not overwhelming at present, although the number of insolvencies is increasing. There were more than 3,500 voluntary and compulsory liquidations in 1991/2, up from 2,800 the previous year.

The amounts of money involved are huge. The figures for compulsory liquidations and bankruptcies, which are just the tip of the iceberg, representing about 10 per cent of business failures, show the outstanding liabilities of the companies liquidated in 1991/2 totalled over $2.6 billion. This was a year in which outstanding liabilities were relatively low. In 1983/4, for example, total liabilities exceeded $10.7 billion.

The current state of business failures is not alarming in comparison to the years of the 1970's property crash, but certainly sufficient to avoid complacency.

The usual Hongkong way of doing things is to wait for another disaster, launch an official enquiry (unless a Government department is involved, meaning it is beyond public scrutiny) and then shut the door after the horse has bolted.

John Budge, a litigation partner at solicitors Wilkinson & Grist, offers two measures which might help change the pattern of only acting in the wake of a crisis. He suggests putting preventative measures in place before things get bad.

One measure would be to establish a Register of Guarantees. This would give those advancing loans, and other forms of credit, an opportunity to assess the outstanding liabilities of those applying for new funding.

One of Hongkong's most spectacular debtors managed to build his debt mountain by roaring around the territory offering personal guarantees for his company's loans. The lenders had no means of finding out how many other personal guarantees this particulargentleman had outstanding and, assuming he had sufficient personal wealth to cover his liabilities, proceeded to lend.

But while he had the means to cover individual debts, he certainly did not have a sufficient amount to cover them all. However, the full extent of his personal liabilities was not known.

Last year the Standing Committee on Company Law Reform examined another measure which would help alert lenders to company liabilities. This was the establishment of a Register of Charges, which would record, for public scrutiny, all charges registered against companies.

Britain has been trying to establish such a register since 1989 but has run into some legal problems in implementing the scheme. In true colonial fashion the Standing Committee decided it would be better to wait for Britain to sort out its problems before attempting to start the scheme here.

However,it hoped to see some progress in the first half of the current year, as this was ''a subject of great practical importance to both businessmen and professionals''.

The committee will be disappointed because, as is the way of bureaucracies, it is taking its time.

Equally disappointed will be those trying to discover the property holdings of reticent debtors or others who would prefer not to have their assets too easily identified. Mr Budge suggests this problem can easily be overcome by establishing a Register ofNames.

Such a register would enable members of the public to check property holdings by looking up the name of the owner. As matters stand they can go to the Land Office or one of the district land offices and find out the name of the owner of a particular building but, if they do not know the precise name or location of the building, they are stuck.

A register of names would solve this problem at a stroke. The absurdity of the situation is that such a register exists but is only available for scrutiny by civil servants. In case the Government has not noticed, we live in the age of the computer, meaning information of this kind can easily be made accessible by electronic means.

Indeed, the Government might even make a tidy profit out of charges for using the register.

My suspicion is that the Government is not so concerned about the logistics of making this information available to the public but it is, as usual, stuck with a general attitude of denying the public the right to know about certain things it believes should only be known by bureaucrats.

The problems of tracing assets admittedly raise questions about invasion of privacy. A balance needs to be struck between the right to retain confidentiality over an individual's business affairs and the rights of those likely to suffer if these business affairs cause loss or injury.

The modest suggestions made by Mr Budge and the Standing Committee on Company Law Reform for improving access to information, seem to adequately preserve this balance.

Unfinished Business is a fortnightly column which will be looking at business matters deserving further investigation. We welcome readers' suggestions and comments. There is no need for suppliers of information to be identified, although we will need to verify any material received. Unfinished Business can be contacted in confidence on 549-2470 or by fax on 547-5478.