Police have foiled a fake $10 coin factory in Tsuen Wan and arrested 13 people believed to be part of a counterfeiting syndicate.

Since September, the Hong Kong Police, Guangdong Public Security Bureau and Shenzhen Public Security Bureau have been investigating a counterfeit coin syndicate which has been active in taxis, maxicabs, stores and newspaper stalls for about six months.

At about 1.45 pm today, Commercial Crime Bureau officers spotted a man handing over a bag to another man who they suspected of being the syndicate's mastermind, at the door of an industrial building on Pak Tin Par Street in Tsuen Wan.

The man with the bag then boarded a taxi for Sham Shui Po where he gave the bag to a third man.

Police officers stopped the two in Sham Shui Po and found about 4,000 $10 coins - believed to be fake - in their possession.

A search on a unit in the Tsuen Wan industrial building found 24 moulds and three machines believed to have been used to manufacture fake coins. Officers also discovered about 15,000 finished coins and about 45,000 unfinished coins.

A 55-year-old man suspected to be the technician for manufacturing the coins was arrested in the factory.

Police raided 19 other locations in Sham Shui Po and Kowloon, arresting three more men and seven women.

They also found and seized another 5,000 suspected fake $10 coins.

Investigations by the Commercial Crime Bureau are proceeding.