Network School, a startup-focused community based in Johor’s Forest City, has suspended further investment plans in Malaysia, including a planned RM500 million expansion, after authorities launched an investigation into allegations that Israeli nationals were among its participants.
Founder Balaji Srinivasan said the organisation was waiting for clarity from the Malaysian government before deciding its next steps, adding that the company remained open to discussions with Putrajaya if Malaysia wanted to continue attracting global technology investment.
“We’ve also revitalised the multibillion-dollar Forest City project, causing millions of ringgit in real estate appreciation,” Balaji said, adding that Network School had invested more than RM100 million in its Forest City campus and supported dozens of Malaysian jobs.
The investigation began after claims surfaced online alleging that Israeli nationals had participated in Network School programmes despite Malaysia not having diplomatic relations with Israel and restricting entry for Israeli passport holders.
The Home Ministry ordered a probe into the organisation, saying the government would not compromise on any misuse of Malaysia’s immigration facilities or activities that could threaten national security, public order or sovereignty.
Johor Chief Minister Onn Hafiz Ghazi had earlier called for relevant agencies, including the Immigration Department, police and Customs Department, to investigate the identities and nationalities of those involved.
Prime Minister Datuk Seri Anwar Ibrahim also said that any Israeli nationals found to have violated Malaysia’s immigration rules would be removed from the country.
However, the Immigration Department said it had inspected 266 foreigners from 40 countries linked to the community and found that they possessed valid travel documents. Further checks are still ongoing to determine whether all entry requirements and laws were complied with.
Balaji said Network School had fully cooperated with authorities and maintained that its members had nothing to hide.
“Anyway, at this point, all further investment we were planning to make in Malaysia is on hold until we get sufficient assurance that such issues won’t recur. So are the investment plans of many of our friends, including the execs and investors at global tech firms that we brought to Forest City,” he said.
The founder added that Network School was prepared to discuss a memorandum of understanding with the Malaysian government that would commit the organisation to following local laws and respecting the country’s sovereignty.
Despite the controversy, some Forest City residents and business operators said the presence of the digital nomad community had brought economic activity back to an area that has struggled with low occupancy.
A local food operator told CNA that Network School members had helped improve business by around 10% to 20% in recent months, while residents said the community had not caused disruptions.
However, some locals also said that if any members were found to have breached Malaysian laws, action should be taken.
Network School, launched in 2024, operates as a technology-focused co-living and co-working community offering programmes including startup activities, workshops and networking sessions. The development has attracted hundreds of foreign participants to Forest City, paying for accommodation and access to its facilities.
CNA
