Prime Minister Anwar Ibrahim vows immediate deportation of any Israeli found in the country as social media allegations trigger an immigration probe of Balaji Srinivasan's Network School community, prompting the founder to freeze further investment and demand written guarantees from Kuala Lumpur
Malaysian Prime Minister Anwar Ibrahim has vowed to immediately deport any Israeli citizen found in the country, after online allegations claimed Israeli nationals had taken up residence at a private technology community in Johor's Forest City development.
"We will not allow it," Anwar told reporters on Wednesday. "If there are Israeli nationals, since we do not recognize Israel, they will be deported immediately." Speaking separately to the outlet Free Malaysia Today, he added that any Israeli found in the country "will be deported immediately because we do not recognize Israel."
Malaysia, a Muslim-majority country with no diplomatic relations with Jerusalem, generally bars Israeli passport holders from entering without written permission from its Home Affairs Ministry. Hamas's military wing is known to maintain a presence in the country.
The controversy centers on Network School, a co-living community for founders, technologists, and self-described "techno-optimists" in Forest City, a China-backed development across the Johor Strait from Singapore. The community was founded in 2024 by Balaji Srinivasan, the former chief technology officer of Coinbase and a former general partner at Andreessen Horowitz.
The dispute began after the activist group Malaysian Protest 4 Palestine posted allegations on social media claiming the community had become a gathering place for Israeli entrepreneurs using second-country passports. The Home Affairs Ministry opened an investigation, and immigration officials raided the campus on July 14, screening 266 foreign residents from 40 countries.
Malaysia's immigration department found that all 266 residents held valid travel documents. Datuk Zakaria Shaaban, the department's director-general, told the New Straits Times that no evidence had yet verified the presence of Israelis in the program, though he said checks would continue if new information emerged.
Despite the initial findings, Srinivasan announced he was freezing further Malaysian investment, including a planned expansion reported at $122 million, or roughly 500 million ringgit. In a post on social media platform X, he wrote that all further investment the company was planning in Malaysia would remain on hold until he receives sufficient assurance that such issues will not recur, adding that the freeze also applies to plans by tech executives and investors he had brought to Forest City.
Srinivasan said Network School had already invested more than $100 million in its Forest City campus without government funding, employing dozens of Malaysians and drawing thousands of engineers, investors, and entrepreneurs from more than 70 countries since its founding in October 2024. He said the expansion, which reportedly included a global merit scholarship planned with Replit founder Amjad Masad, had been shelved as a direct result of the controversy.
He is now requesting a meeting with Anwar's office to negotiate a formal memorandum of understanding between Network School and the Malaysian government, and has warned that the company could relocate its capital elsewhere absent legal guarantees. "If not, then we will readily go somewhere else because I don't want to be where we're not welcome," he said.
The episode unfolds against the backdrop of Forest City's already uncertain footing. The broader development has struggled for years under a developer that narrowly avoided liquidation, and Johor state officials had separately called for a federal review of the project's licensing and land use even before the Network School allegations surfaced.
Srinivasan has not named an alternative location or set a deadline for reaching an agreement with Malaysian authorities, and as of Thursday, officials had not disclosed further details on the status of the investigation.
