CHINA yesterday confirmed its security forces seized the cargo ship Tequila last Sunday, but denied they entered Hong Kong waters. The Hong Kong Government is considering lodging a formal protest over the incident. Official radar readings placed the Tequila at anchor off Tathong Channel when armed men from two speedboats climbed aboard. A Security Branch spokesman said last night the Government was concerned about the difference of opinion about the location of Tequila when seized. It would seek further clarification from China before a formal protest could be lodged. Marine Department radar tracked the Honduran-registered Tequila during the attack. Signals were lost hundreds of metres from the port of a Chinese naval base on Wailingding Dao, an island just outside Hong Kong waters. It is understood printouts of the radar readings have been handed to the Security Branch. The branch has repeatedly said it could only complain about violent attacks on shipping when local borders were violated. Xinhua (the New China News Agency) officials notified their counterparts in the Government's Office of the Political Adviser yesterday that Chinese forces had seized the ship. Exactly why the Tequila was taken and which forces were responsible was not revealed. No mention was made of the fate of the 14 Indonesian and Filipino crew, or the cargo. The 565-tonne ship was about to leave Hong Kong with second-hand cars legally manifested for Keelung in Taiwan. A spokesman for its agents, Fitter Marine, said the company had heard nothing from China or the crew but had heard rumours it was now being held in Zhuhai, the cargo impounded.