Johor orders closure of Network School in Forest City over licence breaches
The Iskandar Puteri City Council issued a stop-business notice after inspections found the site was used for classrooms without the necessary permits.
Authorities in Johor have ordered the cessation of operations at a Network School premises within the Forest City development. The enforcement action, confirmed by state officials, follows findings that the organization failed to comply with local business licensing requirements and land-use regulations.
The Iskandar Puteri City Council (MBIP) issued a Stop-Business Notice (IP012N260714001) after inspections revealed that the school operated across two units while holding a valid business office licence for only one. Furthermore, authorities determined that the site—approved for administrative office use—had been repurposed for classroom activities and promotional events without necessary permits. The council also served an advertisement licence notice for displaying non-compliant signage under Section 107(2) of the Local Government Act 1976, according to statements released by Johor Chief Minister Onn Hafiz Ghazi.
Media additions
The closure follows a period of heightened scrutiny regarding the residency, which functions as a private "startup society." Public concern, amplified by social media claims, initially focused on allegations that the community hosted Israeli nationals who allegedly entered the country using passports from a second nation. Malaysia does not maintain diplomatic relations with Israel and strictly regulates the entry of its passport holders.
However, federal immigration investigations reached a different conclusion. Officials inspected 266 foreign nationals from 40 countries and two Malaysians, finding that all participants held valid travel documents. The department reported that the majority held social visit passes, while 10 individuals were verified under the DE Rantau Nomad Pass program.
Investment and regulatory impasse
Balaji Srinivasan, the American investor and founder of the Network School, has contested the situation. While acknowledging the receipt of notices from local authorities, he described the issues as matters subject to a "remedial period" rather than a total shutdown. Srinivasan stated that he is prepared to adjust signage and resolve licensing discrepancies, yet he has officially paused further expansion plans in Malaysia.
Srinivasan claims the organization has already invested more than RM100 million into the project and had earmarked a further RM500 million for expansion. In a public statement, he requested a meeting with Prime Minister Anwar Ibrahim to negotiate a memorandum of understanding, suggesting that the school's future in the country depends on obtaining assurances that participants will not be treated as illegal immigrants. He noted that if the government does not desire such investment, the organization would look to reallocate its capital to other nations.
What to watch next
- Federal Decision: Johor state officials have publicly urged the Home Ministry to provide a "prompt and final" decision regarding the status of the foreign individuals involved and the long-term viability of the organization.
- Ongoing Enforcement: MBIP has stated that it will continue to monitor the site for compliance with land-use and safety regulations, with further legal action possible if violations persist.
The situation remains a test for Malaysia’s ambitions to attract global technology talent while maintaining strict control over national security and immigration policies. While the initial passport-related allegations remain unsubstantiated by federal investigators, the local licensing breaches have provided a concrete legal basis for the state government to halt specific activities at the Forest City location.
