Network School founder Balaji Srinivasan has announced plans to establish a new campus in Kazakhstan just as Malaysian authorities ordered the closure of his Forest City operation, escalating a dispute that has become a test of the country’s ambitions to attract global technology investment.
The Iskandar Puteri City Council (MBIP) revoked the business licence of Network School operator NSO Malaysia Sdn Bhd and ordered its operations to cease from July 22, saying the decision followed inspections on July 12, 14, 19 and 20, together with a review of enforcement findings and representations made by the company. Hours later, Srinivasan announced that Network School had signed a memorandum of understanding with the Republic of Kazakhstan to establish a new campus offering expedited visas, streamlined business relocation and active recruitment of global technology talent, signalling that the project is pressing ahead with international expansion despite the uncertainty surrounding its future in Malaysia.
According to the council’s statement, one premises was operating without a valid business licence, while another was being used for activities that differed from those approved under its licence. The council also cited advertising approvals that it said had not been obtained. It warned that it would not compromise on breaches of local regulations and said prosecution could follow if operations continued unlawfully.
Johor Menteri Besar Onn Hafiz Ghazi backed the decision, saying it followed due process after authorities verified complaints, conducted inspections and completed the required legal procedures.
The move comes less than two weeks after Network School became the focus of national attention following social media allegations that it had facilitated the entry of Israeli nationals into Malaysia. Immigration authorities subsequently inspected the site and said travel documents examined during the operation were in order, although wider investigations continued.
Founded by former Coinbase chief technology officer Balaji Srinivasan in 2024, Network School describes itself as a global residential community for entrepreneurs, software engineers, investors and researchers. Based in Forest City, the project combines co-living, coworking, fitness and technology education, with members typically staying from one month to a year while building startups, collaborating on projects and attending talks by leading figures from the technology industry. Srinivasan has described it as the first step towards creating “startup societies” that can attract globally mobile talent and capital.
Srinivasan has consistently rejected suggestions that the campus was being shut down.
Writing on X on July 18, he said reports of a closure were “fake news”, arguing the organisation had received only two notices: one relating to signage and another involving licensing for adjoining premises that had been combined into a coworking space. He said both issues carried remedial periods and would be addressed, adding that members were otherwise unaffected.
Days earlier, Srinivasan had publicly appealed to Malaysian Prime Minister Anwar Ibrahim, arguing that the controversy risked undermining confidence among international technology investors.
He said Network School had invested more than RM100 million in its Forest City campus without government funding, attracted participants from more than 70 countries and helped revitalise the long-struggling development. He also claimed plans for a RM500 million expansion had been placed on hold pending assurances about Malaysia’s investment environment.
Srinivasan accused anonymous social media accounts of spreading false allegations that triggered investigations and questioned whether global technology companies and venture capital investors should continue expanding into Malaysia until greater certainty was provided.
Network School founder Balaji Srinivasan says the project has invested more than RM100 million into Malaysia’s Forest City without government funding, but claims a planned RM500 million expansion has been put on hold amid growing regulatory uncertainty
The dispute has unfolded against the backdrop of Malaysia’s drive to position itself as a regional technology hub through initiatives such as KL20, digital nomad visas and the Johor-Singapore Special Economic Zone.
For supporters, Network School represents an unusual experiment in attracting founders, engineers and investors to live and work together in Forest City, a vast waterfront development that has struggled to attract residents since its launch.
Among those defending the project is Polygon co-founder Sandeep Nailwal, who argued that Network School was creating the foundations of a privately funded technology institution comparable to leading global universities. He warned that losing such investment over what he described as politically motivated claims would damage Malaysia’s standing with international entrepreneurs and investors.
Yet Malaysian authorities have maintained that the enforcement action is about regulatory compliance rather than ideology. The Malaysia Digital Economy Corporation (MDEC) has also begun revoking NSO Malaysia’s Malaysia Digital status, saying companies granted the designation must maintain all required licences and comply with Malaysian laws.
The dispute has become one of the most closely watched tests of Malaysia’s efforts to position itself as a destination for international technology entrepreneurs. While authorities insist the action against Network School is solely about regulatory compliance, Srinivasan’s agreement with Kazakhstan highlights how countries are increasingly competing to attract globally mobile capital, talent and technology ventures.
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