Crypto boss eyes second act for Malaysia’s Forest City after closure of Network School

Network School at first aligned neatly with Malaysia’s ambitions to attract tech talent from afar, complementing a boom in data centre and AI investments. Students came to “lock in” on building their start-ups with like-minded people, shared workouts and protein shakes, as well as Srinivasan’s belief in a new kind of society.

But the school came under scrutiny after allegations that Israeli students were living and studying on its campus, in breach of Malaysian immigration rules. It blew-up into a local backlash that prompted authorities to raid the campus and check the passports of all students. Although immigration officials found everyone at the school had “valid travel documents,”  the damage had been done. 

A widened probe uncovered two violations of local licensing laws and led to an eviction notice.

For Forest City, beleaguered by sluggish sales and the financial distress of its Chinese developer Country Garden, the school was a rare bright spot. 

In a bid to help revive it, the Malaysian government designated the city a special financial zone with a specific focus on attracting family offices. It’s secured assets under management of about RM670 million (S$209 million) from various family offices, although the number is far below its overall target of RM2 billion by the end of 2026.

In July, shortly after the school shuttered, police arrested 335 people who were allegedly operating online scam syndicates out of Forest City, further dimming the prospects of a meaningful revival.

Malaysia’s case for investors is unlikely, however, to be dimmed by the experimental Network School exit. 

Malaysia has long held ambitions to move up the technology value chain and is stepping up efforts to build a higher-value technology economy, with the government targeting an inclusive and sustainable “AI nation” by 2030. The country is seeking to move beyond its traditional strengths in semiconductor assembly, testing and packaging by developing front-end chip-design capabilities while expanding digital and data infrastructure, building skilled talent and attracting investment in areas like AI and advanced semiconductor manufacturing. It’s also seeking to draw more tech talent to the country via a special economic zone being developed with Singapore in Johor.

Adib Zalkapli, founder of Viewfinder Global Affairs, a geopolitical risk consultancy in Kuala Lumpur, agrees the country’s tech future can still be bright. “The case will be remembered, if at all, as a footnote in Malaysia’s tech investment history,” he said. “It will not affect how other technology companies view Malaysia.” BLOOMBERG