The Llama IV minutes after the collision (trey.menefee/flickr).

The Llama IV has been pulled out from Hong Kong's Victoria Harbor (trey.menefee/flickr).

Hong Kong police have arrested seven crew members from two boats that collided in Hong Kong's Victoria Harbor Monday night, which resulted in the death of 38 people. The crew members have been detained on suspicion of endangering passengers by operating their craft in an unsafe way.

The suspicion is based off the fact that Victoria Harbor is considered one of the safest and most regulated waterways in Asia. 

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

The accident is Hong Kong’s worst maritime disaster in four decades. The previous being a ferry accident that killed 88 people during a typhoon in 1971.

The Lamma IV, a boat owned by the Hong Kong Electric Co., was carrying more than 100 employees and their families to observe the fireworks over Victoria Harbor. At roughly 8:20 p.m. it collided with a ferry traveling from Hong Kong to Lamma Island. 

The Sea Smooth ferry, the commuter ferry involved in the accident, was able to continue its route to the island without anyone seriously injured. 

The Lamma IV on the other hand encountered the most serious damage when the "boat came in close and crashed. After the crash the boat continued away. It didn't stop," said Yuen Sui-see, director of operations of Power Assets Holding, the company that owns Hong Kong Electric. The Lamma IV immediately began to tilt up and sink. 

“The water rose so quickly. We thought we were going to die for sure,” one woman, who declined to be named, told CNN affiliate i-Cable. She continued, “Everyone was underwater. The boat overturned, everything came crashing down, the chairs slid down.” 

Rescue services were quickly on the scene with boats and helicopters. They managed to rescue more than 100 people from the water. Twenty-eight were declared dead at the scene, while another nine died in a local hospital. 

Hong Kong Police have arrested seven crewmembers from the vessels on suspicion of endangering the passengers. 

Rescuers are continuing the search for survivors as countless are still missing. 

Reach Staff Reporter Joseph Krassenstein here.