A Nepali businessman with a long, controversial history in Malaysia has been arrested over an alleged transnational network involving human trafficking, fake visas and financial crimes worth more than Rs3.37 billion.

Malaysia’s Immigration Department made public the arrest of Mahendra Jung Shah, 43, last week. Originally from Kalikot district, Shah was detained in Kuala Lumpur while attempting to flee in a car, according to Malaysian authorities. He was arrested along with eight other people from Nepal, India, Bangladesh, Malaysia and Vietnam—aged between 26 and 61.

Authorities seized 111 passports, 10 laptops, six mobile phones, cash amounting to 3,950 ringgit and fake visa stickers during the operation. Officials described the case as one of the largest in recent years involving undocumented migration and forged documents.

According to Immigration Director-General Zakaria Shaaban, the arrest followed six months of intelligence gathering. “Our investigation shows that the group led by Shah has been involved in illegal transactions exceeding 100 million ringgit since 2019,” he said at a press briefing. “We have dismantled a network engaged in smuggling foreign workers into Malaysia and providing them with fake immigration documents.”

Investigation officers said the group charged between 5,000 and 6,000 ringgit per person to produce fraudulent visas for migrants already inside Malaysia.

From terrorism allegation to fraud

Shah is known as a controversial businessman in Malaysia, where he has lived for nearly two decades. Known among Nepali migrant circles, he is accused of using his links with local police and influential figures to exert control over workers and businesspersons alike, often keeping them under pressure.

According to reports, Interpol has listed him as an individual with a long-term presence in both Malaysia and the United Arab Emirates. His notoriety dates back to August 19, 2016, when he was arrested by Malaysia’s counter-terrorism unit on suspicion of links to the Islamic State group and other extremist networks. He was deported on September 2, 2016.

At the time, Malaysia’s then Inspector General of Police Khalid Abu Bakar said investigations indicated Shah was involved in operating entertainment businesses and hotels, and allegedly produced fake documents to facilitate the movement of suspected militants. “We believe he was engaged in preparing fraudulent documents to ease the travel of terrorists,” read the police statement.

Following his deportation, Shah was arrested upon arrival at Tribhuvan International Airport in Kathmandu. Nepal Police filed a public offence case, but the District Administration Office released him on September 11, 2016 on bail of Rs6,000, citing a lack of sufficient evidence. He has consistently denied any links to terrorist groups.

In September 2024, Interpol’s National Central Bureau in Singapore sought information from Nepal Police, noting that Shah remained under surveillance for suspected involvement in terrorism and financial activities linked to terrorism.

Even before his 2016 arrest, more than 30 Nepali migrants had filed complaints against him at the Nepali Embassy in Malaysia, accusing him of fraud. They alleged that he charged up to 11,000 ringgit per person for “professional visas” with two-year validity. The documents were later found to be fake when the victims were detained at Malaysian airports.

Amid mounting complaints, Nepali Embassy formally requested Malaysian authorities in January 2016 to investigate and take action against Shah. He was also removed from his post as president of the Non-Resident Nepali Association (NRNA) Malaysia over allegations of cheating migrant workers and recruitment agencies, despite having a year left in his term.

Return to Malaysia after deportation

Malaysian authorities are now investigating how a previously deported individual managed to re-enter the country.

Shah, who had been deported in 2016, is reported to have returned to Malaysia using a “professional visa” (DP10)—a category typically issued to highly skilled or managerial-level workers. His re-entry has raised serious concerns among immigration officials.

“Under Malaysian law, individuals suspected of involvement in terrorism should be permanently barred from entry,” an immigration source was quoted as saying by Malaysian media. “It remains unclear how he was able to return.”

Shah has denied any wrongdoing. Speaking to local media, he said that if he was truly involved in terrorism, he would have been prosecuted under Malaysia’s strict laws.

Corporate records from the Companies Commission of Malaysia show that Shah has been serving as a director of Stellar Diamond SDN BHD since May 2024, holding a 40 percent stake in the company. The firm is engaged in cleaning services, with the remaining shares owned by a Malaysian national.

Shah has also been linked to Vietnamese national Nguyen Thi Ngan, a director of HCC Cleaning Service. Authorities are investigating her possible involvement in the alleged illegal activities. Although records indicate she is married to a Malaysian citizen, reports suggest she shares the same residential address as Shah.

Shah has denied any personal relationship, describing her as “only a business partner and friend”. “Appearing together in photos does not mean we are married,” he has said.

Sold labour ‘demand’ to recruitment agencies

Shah is alleged to have operated as a middleman in Malaysia’s labour recruitment chain, buying “demand letters” from employers and selling them to manpower agencies. These documents, which specify the number of foreign workers required, are essential for legal recruitment.

Sources say Shah maintained close links with employers willing to hire workers through his network. Instead of directly bringing in workers, he sold these demand quotas to recruitment firms. In recent times, each worker quota has reportedly been traded for at least 3,000 ringgit.

His name has also surfaced in a controversial death case. On April 7, 2023, 46-year-old Renji Rai, owner of ‘Marvelous Employment’, was found dead in a hostel of Star Domain Research Company in Nilai, Malaysia. His family disputes claims of suicide.

Rai’s wife, Indrasuba Rai, filed a complaint seeking investigation into several individuals, including Shah, after 64 workers sent through the network reportedly failed to secure jobs despite large payments. “Very few businesspersons have not suffered because of him [Shah],” a Nepali businessman based in Malaysia said on the condition of anonymity. “Those who know him prefer to stay away.”