HONG KONG — Hong Kong authorities have made the city's largest ever gold smuggling bust, seizing 146kg of the precious metal disguised as machine parts.

The haul is estimated to be worth more than $10m (£8m) and was intercepted last month on route to Japan.

A 31-year-old man has been arrested and released on bail pending further investigations. Smuggling is a serious offense and carries up to seven years in jail under Hong Kong law.

Customs officials say they made the discovery while examining two air compressors — departing in a cargo shipment to Japan on March 27 — which drew suspicions due to their unusual texture and weight.

An examination ultimately found both were riddled with gold that had been "molded and camouflaged" into parts such as gears, screws, and motor cores, according to a government statement on Monday.

Authorities have suggested a crime syndicate looking to evade taxes in Japan may have been behind the operation.

Hong Kong is one of the world's largest gold trading hubs and prices of the commodity have been rising amid geopolitical uncertainty. — BBC