Larry Jewelry faked HK$130M of trades — its auditor refused to sign, and it was delisted

Larry Jewelry was founded in 1967 in Hong Kong and Singapore and grew into one of Asia's best-known high-end jewellers, carrying the nickname 'King of Asian Gems' (亞洲寶石之王). In 2009, Eternite International — founded in 1999 and floated on the HKEX GEM board in October 2009 at HK$0.25, raising about HK$40 million — acquired the brand, and in October 2011 the listed company was renamed 俊文寶石國際有限公司.

The problem surfaced in the 2018 annual report: other receivables suddenly jumped by more than HK$130 million. Auditor Zhonghui (中匯) issued a qualified opinion, saying it could not obtain sufficient evidence about the nature, existence or recoverability of the amounts. Regulators later concluded the sums were largely fabricated — fake transactions booked in 2018 to paper over the accounts.

The business unravelled quickly. First-half 2020 revenue fell 60.4% to HK$58.194 million, net current liabilities reached HK$133.79 million and the asset-liability ratio hit 869%. Trading was suspended on 17 August 2020, and after the company failed to resume by 16 August 2021 it was delisted on 15 December 2021 under GEM Rule 9.14A. The SFC investigation into the 2018 transactions continued after the delisting; in July 2022 the case was reported as involving more than HK$130 million of suspected fake trades.