On March 26, 2025, Malaysian authorities launched a significant investigation into the MBI Group, a company suspected of running a pyramid scheme, focusing particularly on the flow of funds related to a major real estate project in Penang known as Bayan Mutiara. This investigation has led to the summoning of several business figures and lawyers in both Penang and Kuala Lumpur.
According to reports from The Edge, at least two corporate lawyers in Penang have been questioned, and police have confiscated property and stock trading documents connected to MBI from their offices and homes. These documents include transaction records related to the Bayan Mutiara development project, which a company associated with MBI became the largest shareholder of in 2018. This land is considered one of the most valuable assets in Penang, with a potential development value approaching RM100 billion.
The investigation is being led by the Anti-Money Laundering Crime Investigation Team from Bukit Aman, which has conducted simultaneous raids in both Kuala Lumpur and Penang. The operation, which began last week, caught many of those investigated off guard, marking the first large-scale action by the police against MBI after months of inquiries into the company's financial activities.
The Bayan Mutiara project spans 102.6 acres, with 35 acres needing to be reclaimed from the sea near the Penang Bridge. The project was initially bid by the Penang Development Corporation in 2011 for RM1.07 billion, and the winning bid was placed by Ivory Properties Group, which is linked to MBI. Ivory Properties is also known as the developer of Penang Times Square, where MBI was once the main tenant, although the mall is currently vacant.
After winning the bid, Ivory Properties collaborated with Tropicana Corp Bhd to develop the Bayan Mutiara project, branding it as Penang World City, which was expected to be the largest real estate development in the area. However, financial difficulties led both Ivory and Tropicana to withdraw from the project in 2018, selling their shares to Hemat Tuah Sdn Bhd. This company is controlled by Zhang Bishu's brother, who holds 45% of its shares, while another shareholder, reported to be Zhang's brother-in-law, holds 15%.
As part of the investigation, police have summoned not only the two lawyers who handled the transactions between Ivory Properties, Tropicana, and Hemat Tuah but also two additional individuals involved in the Bayan Mutiara project. One of these individuals is a former director of Hemat Tuah and a notable figure in Penang's real estate sector. Furthermore, a major shareholder from several listed companies in Kuala Lumpur has also been called in to assist with inquiries regarding the flow of MBI's funds.
MBI Group, founded by Zhang Bishu, has been labeled a pyramid scheme, with its primary product being a digital currency called M-Coins, which has never received approval from Bank Negara Malaysia. The company attracted thousands of investors globally, including many from China, who were led to believe they could earn substantial returns by depositing funds into the scheme. MBI reportedly raised billions of ringgit, but the scheme collapsed in 2018 following a raid by Bank Negara, leaving investors with significant losses. The frozen accounts of MBI International Group contained only RM177 million.
While many Malaysian investors reacted with indifference to MBI's downfall, numerous Chinese investors expressed outrage, staging protests in Kuala Lumpur and filing lawsuits in local courts to recover their investments. Reports indicate that up to two million Chinese investors may have been defrauded, with claims amounting to as high as 500 billion yuan.
Zhang Bishu fled to Thailand in 2019 to evade authorities but was arrested by Thai police in 2022. He was subsequently extradited to China in August 2024, where he faces charges related to the operation of the pyramid scheme and other financial crimes. The Malaysian police had previously issued a warrant for his arrest in 2021, accusing him of establishing a large-scale pyramid scheme and selling shares of MBI Group to the public.
The ongoing investigation into MBI and the Bayan Mutiara project highlights the complexities of financial crimes and the challenges faced by authorities in tracing illicit funds. As the police continue their inquiries, they remain focused on determining whether MBI's funds have infiltrated other businesses, particularly listed companies in Malaysia.
In conclusion, the unfolding saga of MBI Group serves as a stark reminder of the potential pitfalls of investment schemes that promise high returns with minimal risk. As more details emerge from the investigation, it is clear that the repercussions of MBI's operations will be felt across the financial landscape in Malaysia and beyond.
