THE Shenzhen factory which was gutted by fire on Thursday, killing six people, had repeatedly flouted fire regulations and authorities had failed to take action. The Hong Kong-owned leather factory had been found in several inspections to have allowed workers to sleep in warehouse and work areas, blocked fire exits, and sealed many windows. A Pinhu town official said: ''The factory was to move to Zhongshan, Zhuhai in the middle of this month. It was possible that's why the owner did not make improvements - to save money.'' The Hualian Leather Factory in Longgang's Pinhu industrial zone is owned by Hong Kong businessman Cheng Sai-hung. The Shenzhen authorities have set up a team to investigate the cause of the fire and pledged to continue factory inspections. Government spokesman, Li Xiaogan, said: ''We had inspected the [Hualian] factory five times after the handicrafts factory fire in Kuiyong town last November. We discovered that it failed to meet fire safety regulations and had asked it to improve. ''But it made no improvements and then the tragedy happened on Thursday. The owner should be responsible for the accident because they have the duty to ensure the safety of their workers.'' He said no one was detained yet but Mr Cheng and factory managers had been interviewed. The Pinhu official said fire exits were blocked by illegally built structures - trapping the six victims, including a Hong Kong technician. But both officials declined to say why the Government failed to take action when the factory was found to be unsafe. Mr Li said 17 people were in the building at the time of the fire, which broke out at around 4 am. One Hong Kong technician and five female workers were suffocated in the fire and 11 workers escaped uninjured. The five workers killed included three from Guangzhou and one each from Hainan and Guangxi provinces. The blaze broke out at the ground floor storage area of the three-storey building. Firemen took more than nine hours to extinguish the blaze. The Hong Kong Confederation of Trade Unions accused the Shenzhen authorities of allowing the factory to continue its operation despite the fire hazards. ''Regulations mean nothing if the Government does not take action against a factory in breach of the rules,'' confederation chief executive, Lee Cheuk-yan, said. ''They should have suspended the operation until it had improved fire safety.'' He said the tragedy happened in another ''three-in-one'' situation meaning the warehouse, factory workplace, and staff quarters were in the same building. ''It poses a great danger to workers. No one should be allowed to sleep in the warehouse and factory,'' he said. The confederation urged the Chinese Government to order high compensation for those who were killed or injured in industrial accidents and set out policies to avoid any repeat. ''This will have a deterrent effect and force factory owners to follow the fire safety measures and make improvements,'' Mr Lee said. Attempts to contact the factory owner, Mr Cheng, yesterday were unsuccessful. At present, factory owners in Shenzhen are liable to a 30,000 yuan (HK$26,790) fine for each death or 5,000 yuan for each injury because of negligence with industrial safety. Tougher safety rules have been imposed since the Zhili Handicrafts factory fire in Kuiyong, also in Longgang, last November which killed 84 people. All factories and buildings in the region are being checked by officials for safety measures. Mr Li said some factories involving Hong Kong ventures had been ordered to cease business after they failed to comply with fire safety requirements. ''We will continue our action and step up inspection to avoid the repeat of such tragedies in the future,'' he said. According to the Hong Kong China News Agency, there were 134 factory fires last year in Shenzhen - 116 involved foreign investments. There are more than 30,000 foreign enterprises in the zone.