‘Cursed island’: the $100bn luxury development hosting tech nomads and scammers

{"text":[[{"start":11.28,"text":"Malaysia’s Forest City is billed as a luxury housing and leisure development, yet when police raided a tower in the leafy complex recently they found not well-heeled residents, but an alleged scam enterprise staffed by hundreds of Chinese nationals."}],[{"start":24.88,"text":"“It was a much bigger operation than we were expecting,” said a person involved in the July 15 operation. “It took us two days to do the paperwork.”"}],[{"start":34.08,"text":"The raid, which echoed recent busts on scam compounds in rundown buildings across poorer parts of south-east Asia, was just one of a long line of blows to the reputation of Forest City, a Chinese-backed development co-owned by the king of Malaysia and promoted by Kuala Lumpur and the Johor state government."}],[{"start":51.12,"text":"The $100bn project off the tip of the southern state, just a mile away from Singapore, drew more unfortunate international headlines a week later when local authorities’ closure of Network School, a US-founded co-living start-up community, sparked anger in Washington."}],[{"start":67,"text":"It is all bad news for the artificial island development promoted as a “dream paradise” when it was launched in 2014."}],[{"start":72.8,"text":"“This is a cursed island,” said an American tech worker walking through the complex’s empty streets last week."}],[{"start":79.48,"text":"Forest City was meant to be a beacon of Beijing’s Belt and Road global infrastructure initiative, showcasing China’s economic might and projecting its influence. The plan was to build a gleaming city of 700,000 people. But difficulty attracting residents and a Chinese property crisis have left little to show but a sparsely populated high-rise ghost town."}],[{"start":null,"text":"

"}],[{"start":99.24,"text":"Forest City is a joint venture between Chinese property developer Country Garden and Esplanade Danga 88, a private company controlled by Sultan Ibrahim Iskandar, the motorbike-riding ruler of Johor who is king of Malaysia under the country’s five-year rotating monarchy."}],[{"start":114.6,"text":"The development was designed as rows of tightly packed skyscrapers next to a high-end hotel, with shops and restaurants along a 4km coastline. Nearby palm tree plantations also feature a premier golf resort."}],[{"start":126.56,"text":"The apartments were first marketed to Chinese nationals as investments and as residences for retirees and young families willing to relocate to the area. Prices started at RM780,000 ($190,000) for a two-bedroom apartment."}],[{"start":141.92,"text":"For some it has proved a good move. Maggie Gao arrived in 2019 with her husband and son from Beijing. She recently gave up working remotely for a Chinese technology company to open a coffee shop on the beachfront."}],[{"start":null,"text":""}],[{"start":154.68,"text":"“There is a much slower pace of life here than in Chinese cities,” Gao said. “Everything is well maintained. We like it here and are happy to stay.”"}],[{"start":164.28,"text":"But she said many neighbours who also moved from China ended up going back during the Covid-19 pandemic and were unable to sell their properties. Those who could not keep up mortgage payments had apartments repossessed."}],[{"start":177.16,"text":"With China still stuck in a property slump, debt-laden developer Country Garden has been unable to prioritise its largest overseas project. The original design was for a complex covering four islands, but even the first is yet to be completed."}],[{"start":191.84,"text":"In recent years, the Malaysian and Johor governments have sought to encourage businesses to move to the area, touting its digital connectivity and offering foreign workers fast-tracked residency and low tax rates."}],[{"start":204.02,"text":"Forest City was trumpeted as a hub for family offices and fintech companies as part of a special economic zone linking Johor and Singapore that launched last year."}],[{"start":214.04,"text":"But such incentives and facilities appear to have attracted unwanted newcomers."}],[{"start":null,"text":""}],[{"start":219,"text":"Johor police said raids on two separate scam operators last month — including the one on 27 apartments across five storeys of a Forest City residential tower and another on five bungalows — led to the arrests of 335 people."}],[{"start":233.44,"text":"They were 309 Chinese nationals, 19 Indonesians, four Myanmar citizens and three Malaysians. The operations involved alleged investment, cryptocurrency and romance frauds. Such activities are sensitive for neighbouring Singapore, whose citizens have been particularly vulnerable to scams."}],[{"start":252.4,"text":"In the residential tower, police discovered a dedicated shop selling instant noodles for workers who had been instructed not to leave the premises, according to the person involved in the raid. They also found unconnected air conditioning units and new furniture."}],[{"start":265.76,"text":"“It looked like they had been running for less than a month,” the person said, adding that those involved were likely to be criminals who had fled from compounds closed by police in other parts of south-east Asia. “This is just a spillover effect.”"}],[{"start":278.56,"text":"Country Garden, Esplanade Danga 88 and the Johor government did not respond to requests for comment. The Johor police declined to comment further than their public statements on the raids. The arrested individuals could not be reached."}],[{"start":null,"text":""}],[{"start":291.52,"text":"There is no suggestion of organised criminality at the now-closed Network School, a co-living start-up community founded in Forest City by US tech entrepreneur Balaji Srinivasan."}],[{"start":302.48,"text":"Srinivasan, a former chief technology officer at cryptocurrency exchange Coinbase, launched Network School in 2024 with the intention of setting up a “frontier community of techno-optimists”."}],[{"start":314.4,"text":"Hundreds of digital nomads from around the world moved to the development, enticed by the offer of accommodation, meals and a workspace — as well as benefits such as coding workshops, language lessons and wellness programmes — for packages starting at $1,500 a month."}],[{"start":331.08,"text":"Yet the community unravelled spectacularly last month following online allegations that Israeli nationals were among its members. Malaysia, which has close ties with Palestine, does not recognise Israel and does not allow Israeli passport holders into the country without special approval."}],[{"start":null,"text":""}],[{"start":347.6,"text":"Malaysian authorities investigated the Network School and subsequently ordered it to cease operations, citing licensing breaches rather than immigration problems. But comments from Prime Minister Anwar Ibrahim that any Israelis found there would be deported prompted the US state department to summon Malaysia’s ambassador and expressions of anger from US Congress members."}],[{"start":367.68,"text":"Srinivasan — who has denied Network School members broke immigration rules — has announced the organisation will open a new hub in Kazakhstan."}],[{"start":375.56,"text":"By last week, Network School signage at Forest City’s Marina Hotel, the community’s base, had been hastily removed and the lobby coffee shop bearing its name had been rebranded."}],[{"start":385.8,"text":"While most of the Network School members had left, several were hanging around the hotel’s foyer and gym."}],[{"start":391.32,"text":"One Venezuelan tech worker said he had arrived in Forest City two weeks earlier to check out the community."}],[{"start":396.6,"text":"“It’s a great shame what has happened, but it hasn’t put me off this place,” he said. “I would definitely consider coming here to set up a business. There are great facilities and it is very quiet — that is a good environment to work in.”"}],[{"start":415.76,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1785831420_4273.mp3"}