Network School ordered to cease operations at Forest City site over licensing breach; founder says operations continue
Johor Chief Minister Onn Hafiz Ghazi said the Iskandar Puteri City Council has issued a cessation notice to one of the startup community's premises as well as an advertising licence notice for displaying non-compliant signboards.
A Network School sign is seen in Forest City, Johor, on Jul 16, 2026. (Photo: CNA/Zamzahuri Abas)
ISKANDAR PUTERI, Johor: In the latest twist in the saga between Malaysian authorities and the Network School in Forest City, the Johor government has issued a cessation order to the startup community after finding that one of its premises was operating without a valid business licence.
But Balaji Srinivasan - the American investor behind the organisation – on Saturday (Jul 18) disputed reports suggesting that the Network School is shutting down, saying it has received two notices from authorities and would have a “remedial period for both issues”.
“But our members are otherwise unaffected,” he wrote on X.
Late on Friday, Johor Chief Minister Onn Hafiz Ghazi said the Iskandar Puteri City Council (MBIP) has issued an enforcement notice to the unlicensed premises as well as an advertising licence notice against Network School for displaying non-compliant signboards.
“The inspection found that the company operates at two premises, where one premise has a valid business office licence, while the other premise was found to be operating without an MBIP business licence even though it is owned by a local citizen,” Onn Hafiz wrote on Facebook.
He added the Johor state government would investigate all matters within its scope and take further enforcement action if any breaches of laws, licence conditions or regulations are uncovered.
This, even as the chief minister called on the federal authorities “to make an immediate, clear and final decision” regarding the status of the nationalities of the Network School’s participants following allegations that some of them were Israeli nationals.
Malaysia, a staunch supporter of the Palestinian cause, bars entry of Israeli passport holders as the countries do not have diplomatic relations. However, it reportedly does not have specific laws barring Israelis from using passports from a second country.
In what appears to be only the second time that Balaji has spoken about the high-profile probe into the Network School, the investor claimed that they had received two notices from local authorities.
“The first tells us to change the text of a sign. The second says that our coworking site, which was created by joining two adjacent units, evidently has a valid license on the left-hand side but not the right-hand side,” he said.
“We have a remedial period for both issues, and will remediate them shortly.”
Earlier on Tuesday, Malaysia’s Home Ministry ordered a probe into Network School, saying that the government will not compromise against any individual or organisation that misuses Malaysia’s immigration facilities or engages in activities that contravene the law and could jeopardise national security, public order or the country’s sovereignty.
This comes after Onn Hafiz called for an investigation, adding that he had asked the ministry, Immigration Department, police, Customs Department and other relevant security agencies to investigate the identities and nationalities of those involved with the Network School.
Malaysian Prime Minister Anwar Ibrahim has also weighed in, saying that the government would expel any Israeli nationals found to be involved in the Network School and that they would be “chased away”.
Local media reported on Thursday that the immigration department had yet to find any evidence that Israeli nationals were present at the Network School.
The department said it had inspected 266 foreigners from 40 countries and found they had valid documents, though further checks were ongoing to ensure compliance with all other entry requirements and related laws.
On Friday, Balaji said the Network School has put on hold any further investment in Malaysia and a planned RM500 million (US$122 million) expansion amid a probe into the organisation.
He also said there are “two paths forward”, depending on whether Malaysia wants “continued global tech investment” or not.
If Malaysia wants such investment, then Balaji said he would like to seek a meeting with Anwar to negotiate terms for a memorandum of understanding for Network School to continue its operations and investments in the country.
