US tech investor pauses Malaysia projects after immigration raid

US tech investor Balaji Srinivasan said he was putting planned projects in Malaysia on hold after authorities raided Network School, his start-up campus in southern Johor state, over claims that it was hosting foreigners illegally, including Israelis.

Srinivasan, a former senior executive at Coinbase, said officials inspected hundreds of passports at the nearly $25 million development after online allegations that the campus was breaching immigration rules. He said on X on Thursday that authorities had confirmed all travel documents were in order. He said further investment planned for Malaysia would be frozen until his group received enough assurance that similar issues would not happen again.

The allegations against Network School included claims that it was allowing Israelis with dual citizenship to work there, although Malaysia does not recognise Israel. Authorities said on Wednesday there was no evidence that Israeli citizens were living or working at Network School. The campus is described as a residential site for start-up founders, software engineers, investors and digital entrepreneurs.

Malaysia has no diplomatic ties with Israel and bars Israeli passport holders from entering the country. The source said Malaysia does not have specific laws on holders of second-country passports.

Srinivasan said his investment group would seek a meeting with Prime Minister Anwar Ibrahim's office to discuss the terms of a memorandum of understanding between Network School and the Malaysian government. The prime minister's office was not immediately available for comment.

Malaysia has sought to present itself as a technology hub through government support, foreign investment and relatively competitive business and living costs. The source said the strategy has drawn billions of dollars of technology investment in recent years, including data centre investment in Johor and semiconductor manufacturing in Penang. It also said experts have pointed to continuing challenges, including a small venture capital ecosystem, bureaucracy and talent outflow.