JOHOR BAHRU – At the lobby of Johor’s Forest City Marina Hotel, a cafe has an exclusive menu and clientele. It serves high-protein meals alongside coffee and tea, but only to members of a technology commune.

Dozens of young people in sneakers and sweatshirts filled the plush sofas in the glass-clad lobby overlooking Singapore’s Tuas across the Johor Strait. They were hooked to their laptops, practising a pitch, or swapping ideas on the latest tech projects they were building.

They were participants of Network School. And for the struggling man-made metropolis in Malaysia’s southernmost state of Johor which has a reputation as a “ghost town”, the commune is perhaps its most visible pocket of life.

While the self-styled “frontier community” of about 200 tech enthusiasts from around the world sees itself as a place where ambitious ideas can come true, elsewhere in Malaysia it has become the centre of a nationwide controversy for allegedly hosting Israeli citizens.

“All that’s been reported in the media are all rumours and speculations,” said one Network School participant.

All of the participants who spoke to The Straits Times did so on the condition of anonymity – it is understood that they were issued a gag order and risk expulsion if they speak to the media.

On July 15, Prime Minister Anwar Ibrahim said that any Israeli citizens who are in Network School will immediately be deported.

Malaysia does not have diplomatic ties with Israel owing to its ...