Business chiefs yesterday poured cold water on claims the Island would benefit from a rush of business from Hong Kong in the wake of Britain's handover of its biggest colony to Communist China.

The Bermuda International Business Association, which represents offshore company interests on the Island, said it was unlikely Bermuda would see a flood of business.

BIBA chairman Tom Davis said: "I don't know of anyone who is out celebrating the handover. It's an extremely interesting historical moment, but as to how it's going to affect Bermuda is difficult to judge at this point in time -- I don't think there will be any effect.'' Mr. Davis added that he had no knowledge of Bermuda-based businesspeople rubbing their hands in glee, as reported in the American press yesterday, at the prospect of Communist-controlled Hong Kong failing.

He said: "If anything, it's the opposite. We have a close relationship with a lot of businesses which have Hong Kong as a base. It's a stable, viable centre for doing business.

"We will benefit from a strong Hong Kong rather than seeing it as an opportunity to benefit from its demise.'' And Mr. Davis added that even if corporate business was to come to Bermuda, the Island could not support the massive operations side of most concerns in Hong Kong.

Scots-born Harry Wilken, a top executive with Bermuda-based Jardine Matheson, backed Mr. Davis.

The mercantile house, founded by two Scotsmen whose opium trade with China led to the Opium Wars last century, which ended with Royal Navy gunboats seizing Hong Kong, transferred its corporate registration to Bermuda in the early 1980s.

But Mr. Wilken said: "Jardine Matheson group employs almost as many people in Hong Kong as the population of Bermuda. We're the largest employer after the government of Hong Kong.

"And with all the development in Hong Kong and southern China we believe it will stay pre-eminent -- we still see Hong Kong as our operational base and we can't see that changing.

"I don't think we will see a flood of business moving out of Hong Kong to go anywhere -- and if they ever did, I think Singapore and Manila in the Philippines would cash in.'' Sir David Gibbons, chairman of the Bank of Butterfield -- which has a branch in Hong Kong that will remain open under the new rulers -- said that around half the companies listed on the Hong Kong stock exchange had a presence in Bermuda, while Chinese shipping firms had moved to the Island in the '70s, although their vessels were flagged elsewhere.

Many millions in Hong Kong pension funds have also been moved to Island in "the last several years,'' added Sir David.

But he said any companies transferring to Bermuda had done so years ago and the Island would "most definitely not'' get much further benefit.

And he said: "The Bank of Butterfield has a substantial office in the Bank of China building in Hong Kong. We did that deliberately because as they were going to be the new owners they might as well be our landlords.

"Much use is made of Bermudian law firms, accounting firms and banks to arrange finance.'' INDEPENDENCE IND