Malaysia Says Goodbye To Network School —After Its Founder Threatened To Leave First

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The Iskandar Puteri City Council held a special meeting on Tuesday (21 July) and ordered Network School to shut down its Forest City premises by Wednesday (22 July) — revoking its business licence and ending the remedial period its founder Balaji Srinivasan had announced just days before.

Network School is a co-living, co-working tech community that Balaji — former chief technology officer of Coinbase, one of the world’s largest cryptocurrency exchanges — operates out of Forest City, a Chinese-built Special Economic Zone on Johor’s southern tip.

The trouble started when authorities received complaints that Israeli nationals had entered Malaysia using passports from other countries. Malaysia does not recognise Israel and bars Israeli passport holders from entry.

Authorities have not found any travel document violations so far, but that was not what closed the school; it was the licensing.

Johor authorities found that Network School had breached licensing conditions and premises usage requirements, and two notices were served last week.

Balaji announced a remedial period; the council met and revoked the licence anyway.

Johor Chief Minister Datuk Onn Hafiz Ghazi backed the decision without hesitation.

The enforcement action was only taken after complaints and information were verified, inspections were conducted, non-compliance was identified and all legal processes were completed.

The Threat Had Already Been Made

When the investigation first went public, Balaji posted on X that Network School had put its planned RM500 million expansion on hold.

If you don’t want our investment, or those of our colleagues at billion dollar funds and trillion dollar companies, we will of course respect your wishes, and reallocate our capital to other countries instead.

The Johor government’s response, delivered through its Chief Minister, its city council, and a briefing to both the King and the Johor Regent, was its own kind of answer.

The investment threat did not soften the enforcement.

It may have sharpened it.

By Wednesday morning (22 July), Balaji had already found a new home: Kazakhstan, where the visas are expedited and the questions, apparently, are fewer.

Nineteen People Cannot Be Found

The Immigration Department said on Tuesday (21 July) that 19 foreigners linked to Network School remain unaccounted for.

Of 430 foreigners identified as connected to the group, 210 remain in Malaysia, and 201 have left.

The remaining 19 are missing.

“They may have left through illegal routes or may have entered the country illegally,” said Immigration director-general Datuk Zakaria Shaaban.

Authorities have checked 379 people across two operations and found no evidence of wrongdoing.

On the question of multiple passports, they noted that the system can only detect misuse if a person enters and exits using different documents.

That is not a clearance; that is a description of a blind spot.

Forest City Sits One Kilometre From Singapore

Onn Hafiz made sure to say that out loud.

“Johor is a strategic entry point to the country bordering Singapore. Any weakness or abuse of the immigration system must be addressed immediately, firmly and without compromise,” he said.

He also called on the Digital Ministry and Malaysia Digital Economy Corporation (MDEC) to review any recognition granted to Network School, should conditions have been breached.

The matter has been presented to the King.

The Johor Regent has been informed.

For a story that began with a licensing check, it has travelled a considerable distance.

READ MORE: Gobind: Network School Should Be Investigated & Prosecuted If Wrongdoing Found

READ MORE: Israelis At Forest City? Malaysia Investigates How They May Have Slipped Through

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Malaysia Says Goodbye To Network School —After Its Founder Threatened To Leave First
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