Scam operations in Malaysia’s Forest City raise governance concerns

Scam operations in Forest City spark governance concerns

Malaysia’s Forest City, a sprawling $100 billion development launched in 2014 by Chinese developer Country Garden and Malaysian partner Esplanade Danga 88, is facing growing scrutiny over governance and oversight. Last week, police uncovered two alleged online scam syndicates operating across 32 luxury homes, leading to the detention of 335 people, including 309 Chinese nationals and 19 Indonesians. The raids have intensified questions about whether regulatory frameworks are keeping pace with the project’s ambitions to become a global hub for wealth and mobile talent. The project, designed for 700,000 residents across four artificial islands by 2035, has seen only one island reclaimed and about 20,000 people living there by 2025, due to Chinese capital controls, policy shifts, the pandemic and Country Garden’s debt crisis.

Challenges in policing a transient population

Senior criminologist P. Sundramoorthy highlighted the significance of the raids not just in terms of arrests, but in how organised networks can exploit mixed-use developments where anonymity is high and social surveillance is weak. The large residential inventory and international population of Forest City, combined with low occupancy in some areas, create conditions that make informal surveillance difficult. “The dispersed nature of the alleged scam operations also demonstrates that organised crime has evolved beyond operating from a single ‘scam centre,’” Sundramoorthy said. These conditions allow criminal networks to operate with relative impunity, exploiting the lack of consistent oversight.

Munira Mustaffa of security consultancy Chasseur Group noted that fast-moving international populations could strain agencies structured around registered residents and conventional neighbourhoods. “You’ve got absentee owners, short-term subletting and no real sense of who is actually in those towers on any given night,” she said. Multilingual cases involving overseas victims and cross-border money flows require financial forensics and international legal cooperation that could overwhelm local enforcement, which is designed for a smaller, more stable community. The complexity of these operations highlights the need for more robust international collaboration.

The raids also revealed that some suspects had previously worked at scam centres overseas, and that flats had been booked under company names while bungalows were registered under individual names. This further complicates efforts to trace and monitor illicit activities. The government is offering tax incentives and a dedicated visa track to attract high-value workers, but the current enforcement mechanisms may not be sufficient to manage the scale and diversity of the population.

The developer of Forest City welcomed the raids and said it cooperated fully with authorities. It also backed a permanent police presence, arguing that a dedicated branch or service centre would improve crime prevention, emergency response and public confidence. Property consultant Samuel Tan described the controversies as “growing pains of urban transformation rather than systemic failures,” but stressed that Forest City’s management needed to shift from ordinary residential oversight to “commercial-grade precinct management.” For bulk corporate leases, stronger checks on beneficial ownership and the nature of businesses operating from units are essential, he said. The physical real estate is ready, but the governance and administrative ecosystem must mature.