Hong Kong authorities raided the offices of the controversial Uber rent-a-car service on August 11 and arrested all of the employees including five drivers. Local police have explained that the Uber drivers did not have the necessary car rental license or even insurance.

Hong Kong's Justice Secretary Rimsky Yuen said on Monday that the evidence submitted against the drivers will determine their legal liability.

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There are no legal restrictions for app-based car rental services like Uber in Hong kong provided that the company and its personnel are operating within the law.

Five other Uber drivers were arrested by police undercover agents who pretended to be their passengers this past week Tuesday. The agents were picked up by the drivers through the Uber app.The police then identified themselves and arrested the driver.

The Uber car drivers are reportedly facing charges of "illegally operating a car for hire service" while the office-based Uber personnel are accused of being their accomplices.

Meanwhile, Uber has announced that its fund-raising campaign in China is "proceeding smoothly."

Rumors are circulating that Uber may no longer seek investors for its Chinese expansion due to quarrels regarding the net worth of the company's outlet in China.

The online car service has issued a statement saying that they are in China for the long haul and promised to publish the results of their capital raising venture as soon as legally possible.

Uber reportedly needs at least $1 billion capital to make it big in the Chinese market and fend off competition from local car rental service Didi Kuaidi, which is heavily financed by large companies like Alibaba and Tencent.

Meanwhile, Didi Kuaidi has completed its own fundraising and has accumulated a war chest of around $2 billion for its own expansion.

Analysys International analyst Zhang Xu said Uber will not give up on China and may even divert funds from its other operations to support its Chinese branch. Zhang's company data showed Didi Kuaidi cornering almost 80 percent of the market in contrast to Uber's 11 percent.

TagsUber, car app rental service, uber hongkong, Uber China, didi kuadi, app run car hailing service, Uber Raid, uber arrest, illegal car service