A deadly fire that tore through a Hong Kong public housing estate late last year, killing 161 people, has exposed deep-seated abuses in the city’s building renovation industry.

The blaze engulfed seven of the eight residential towers at Wang Fuk Court, leaving residents watching helplessly as flames climbed the façades of buildings undergoing major refurbishment, Bloomberg reports.

In the aftermath, Chief Executive John Lee acknowledged that the disaster had revealed “serious problems” in the building works sector, including suspected bid-rigging and cartel-like behavior.

Within days, police arrested several employees from the consultancy supervising the roughly HK$300 million (39 million dollars) renovation project, along with senior figures from the main contractor, on suspicion of manslaughter and corruption.

Hong Kong’s Independent Commission Against Corruption (ICAC) has stopped short of confirming bid-rigging in this case, but says the investigation remains ongoing.

The case has reopened scrutiny of an industry that touches nearly every household in the city. With almost all of Hong Kong’s 7.5 million residents living in high-rise buildings, many constructed decades ago, renovation and maintenance work has become both essential and enormously profitable.

According to government estimates cited by Bloomberg and local media, building refurbishment now generates tens of billions of Hong Kong dollars annually.

Yet enforcement has lagged behind scale. Over the past three years alone, authorities have dismantled at least four sophisticated bid-rigging syndicates linked to more than 70 renovation projects worth a combined HK$2.3 billion.

In several cases reported by Reuters and the South China Morning Post, contractors were found to have coordinated bids, inflated costs, and pressured owners’ corporations to accept pre-selected firms, practices that undermine safety as well as competition.

Housing advocates argue that the problem is structural. Owners’ corporations, often staffed by volunteers with limited technical expertise, rely heavily on external consultants who may themselves have undisclosed ties to contractors.

This creates fertile ground for conflicts of interest, cost overruns and corner-cutting risks, that become lethal when fire safety systems, scaffolding or electrical works are compromised.