Police in Hong Kong arrested seven crew members from two boats in a collision that killed 38 holiday revelers, but offered no theory about how the vessels ran into each other on a clear night on one of the safest and most regulated waterways in Asia.

The Monday night accident was Hong Kong's deadliest in more than 15 years, and the worst maritime accident in more than 40. Some relatives of the dead went to the scene off Hong Kong island's southwest coast to toss spirit money in honor of the victims yesterday, while other people waited at the morgue for tragic news about loved ones.

Police Commissioner Tsang Wai-hung said six people had been detained on suspicion of endangering passengers by operating a boat unsafely. "We expect further persons to be arrested," Tsang said. Police announced a seventh arrest after his comments.

Tsang said police suspect both crews had not "exercised the care required of them by law," but he did not elaborate.

A ferry collided with the Lamma IV, which was taking more than 100 employees of Power Assets Holdings Ltd and their families to Victoria Harbor to watch a fireworks display in celebration of China's National Day and the Mid-Autumn Festival.

The government said in a statement that 101 people were sent to hospitals, 66 were discharged, and four had serious injuries or were in a critical condition.

The ferry was damaged but completed its journey, and some of its passengers were treated for injuries.

Local TV later showed images of the ferry, with its bow chewed up and chunks missing.

Hong Kong and Kowloon (Ferry) Holdings Ltd, the ferry operator, did not return calls seeking comment.

The government said 28 bodies were recovered overnight, and eight more victims were declared dead at hospitals. Two bodies found aboard the vessel yesterday raised the death toll to 38, according to government statements.

At least four of those killed were said to be children.

Salvage crews raised the half-submerged Lamma IV using three crane barges that surrounded it yesterday.

At the same time, several dozen relatives of victims traveled by boat to take part in a traditional Chinese mourning ritual, praying alongside Taoist priests and tossing spirit money into the wind.

As mourners wept and leaned out their boat's windows, other observers could see rescue workers bring what appeared to be a dead body out of the water and put it on the deck of a fire department rescue boat, where it was covered with a sheet or bag.

Police didn't know the exact number of people aboard the boat at the time of the accident and were interviewing survivors to determine if others were missing.

Survivors told local television stations that the power company boat started sinking rapidly after the 8:23pm collision.

One woman said she swallowed a lot of water as she swam back to shore. A man said he had been on board with his children and didn't know where they were. Neither gave their names.

Though there was no immediate word about how the collision occurred on Hong Kong's tightly regulated waterways, it appeared human error was involved. Both vessels should have been illuminated by running lights when they crashed near Lamma island off the southwestern coast of Hong Kong island.

Such large-scale accidents are rare for Hong Kong, a special administrative region off Chinese mainland that has one of Asia's most advanced infrastructures and economies with first-rate public services. The accident is the deadliest to strike the city since a 1996 high-rise fire that killed 41 people, and the deadliest ferry accident since 88 people died during a typhoon in 1971.

Power Assets' director of operations, Yuen Sui-see, said the Lamma IV was carrying 121 passengers and three crew members, well below its capacity of more than 200.

"There was a boat that came in close and crashed," he said. "After the crash, the other boat continued away. It didn't stop."

The ferry involved, the Sea Smooth, has a top speed of almost 45 kilometers per hour and carries up to 200 passengers. Local news reports said it is operated by the Hong Kong and Kowloon Ferry company on a regular scheduled service.

Hong Kong fire services deployed seven boats, including one to support diving operations, and more than 200 rescue personnel, the government said. Four rescue boats and a team of divers were also dispatched from the nearby province of Guangdong, Xinhua news agency reported.

Several dozen relatives gathered at Hong Kong's morgue to await information on their loved ones.

A man who gave only his surname, Lee, said he and several relatives had spent the night searching for his 52-year-old sister, who had boarded the boat with three co-workers from the utility company.

"My niece called me last evening and said she believed my sister was on the boat so we should do something right away, we should go find them," he said.

They went from hospital to hospital, to the pier and a nearby yacht club. Yesterday, Lee was at the morgue, which he said would be the best place to get information.

Victor Li, deputy head of the company that owns Power Assets, was reported by Hong Kong media as saying the firm would provide emergency payments of HK$200,000 (US$25,793) to the family of each person killed.

Li's father, Li Ka-shing, is Asia's richest man. Power Assets Holdings Ltd, one of several companies in the elder Li's sprawling business empire, owns the Hong Kong Electric Co, one of the city's two electrical utilities.

Li Ka-shing visited a hospital yesterday and told reporters he felt "very sorry."

"I don't want to say too much. I just know that many people have passed away," he said in comments broadcast on Cable TV Hong Kong.

Social media sites lit up with discussion of the tragedy and condolences for the victims and their families.

Lamma is the third-biggest island in Hong Kong and near one of the coastal Chinese city's busiest shipping lanes.

The island is home to about 6,000 people, including many expat workers.

The tragedy is a test for Hong Kong Chief Executive Leung Chun-ying's new administration.

After the collision, Leung rushed to the pier where rescue work was taking place.

He said later in the day that he would set up a commission of inquiry to investigate the crash.