Flags flew at half mast and leaders observed three minutes of silence yesterday as Hong Kong mourned the 38 victims of a ferry collision that sent shockwaves through the Asian financial center. Chief Executive Leung Chun-ying led senior officials in a memorial service at the harborside government headquarters, while schools and other public institutions also fell silent. Hong Kong’s worst maritime accident in 40 years saw a high-speed ferry, the Sea Smooth, collide with a pleasure craft, the Lamma IV, carrying around 120 passengers on a company trip to watch national day fireworks on Monday night. The Lamma IV’s left rear was torn open in the impact, throwing scores of passengers into the sea. The vessel’s stern flooded within minutes, trapping passengers in the submerged cabin. British Prime Minister David Cameron sent his condolences to the victims after the consulate in the former British colony confirmed that an unidentified Briton was among the dead. US Consul General Stephen Young and European Union foreign policy chief Catherine Ashton also extended condolences, with Ashton saying the accident was \"a serious blow to a city for which the sea is its soul\". Mourners accompanied by Taoist priests boarded boats in a sad procession to the scene of the collision off Lamma island, a few kilometers (miles) southwest of Hong Kong, where they threw paper offerings to the dead into the sea. Shock and disbelief that such an accident could have happened in one of the world’s busiest ports, which prides itself on its state-of-the-art transport infrastructure, gave way to grief as the traditional mourning period began. Around 500 people attended a memorial service at St John’s Cathedral, where Hong Kong Electric executives paid tribute to staff who died on the Lamma IV in what was meant to be a holiday cruise for employees and their families. Investigators pored over the salvaged wreck of the Lamma IV seeking clues as to how two large, seaworthy vessels could have crashed into each other on a clear and relatively calm night. Police arrested the captains of both vessels on Tuesday along with five crew, pointing to possible human error as the cause of the accident. Criticism has also been leveled at ferry operators for ramping up the frequency of services during the holiday period, placing unreasonable strains on captains and crew. Authorities have said that in a six-month probe, investigators will try to determine why the Lamma IV sank so quickly, whether there was adequate safety equipment on board and if the captains followed the rules of the sea.