Coronavirus: Hong Kong bankruptcies for May the worst since 2003 Sars epidemic, as experts paint dour picture of road ahead
- With courts closed or barely working from February to April, the first five months of the year still saw personal bankruptcies climb 12.5 per cent from 2019
- Liquidation expert says residents will try to solve cash-flow issues as long as they can, but ultimately it will be ‘much worse’ than during Sars epidemic
Personal bankruptcies in the city shot up from just six in April to 2,079 the following month, while companies’ winding-up petitions jumped from one to 68 in the same period, according to data released by the government’s Official Receiver’s Office on Friday.
With courts closed or operating on a minimal basis between February and April, personal bankruptcies for May surged threefold year on year as they fully reopened, while petitions to wind up non-limited companies increased 62 per cent.
But even with filings largely on hold for those three months, Hong Kong registered 3,611 personal bankruptcies in the first five months of the year, up 12.5 per cent from the same period in 2019. The 146 winding-up petitions for companies in the first five months of the year, meanwhile, represented a 25 per cent jump from last year.
It will be much worse than Sars in 2003, as that epidemic was regionalised, affecting a few countries. This pandemic is affecting the whole world.
Derek Lai Kar-yan, vice-chairman of Deloitte China and a veteran liquidation expert, said this was just the beginning, as people would attempt to solve their cash-flow issues for as long as they could. He expected the bankruptcy trend to continue to rise over the next few months.