The Malaysia-Nepal migrant scam nexus

Rinji Rai, 47, had been in the labour recruitment business for two decades, connecting Nepali workers with employment overseas.

His Marvelous Employment Nepal agency in Kathmandu had partnered with Rose Overseas in Kuala Lumpur to recruit and send 64 workers who found themselves jobless when they got to Malaysia.

On 7 April, there was commotion at the workers’ dormitory in the town of Nilai on the southern outskirts of Kuala Lumpur. They had seen a man hanging in the lavatory.

He was Rinji Rai, and had flown in from Kathmandu only three days earlier to resolve the issue of his stranded Nepali recruits. 

Malaysian police ruled out foul play, but Rai’s widow Indrasuwa Rai and the Nepal Association of Foreign Employment Agencies believe his death is suspicious and want it investigated. 

Rai’s death has once more exposed a nexus between labour suppliers in Malaysia and recruiters in Nepal who charge desperate workers exorbitant fees to find them jobs which either do not exist, is not the employment they were promised and in which the pay is much less than in the contract.

“There is a gang of people who sell demand quotas by showing big dreams to Nepali recruiters like Rinji,” Sujit Kumar Shrestha, former general secretary of the Nepal Association of Foreign Employment Agencies. “Rinji lost his life to them.” 

Rai’s wife Indrasuwa is now left to raise three children on her own, and believes her husband was murdered. She has photographs and videos of him hanging in the toilet, and says it was staged to look like a suicide. 

“It clearly shows that it was not suicide but a murder, possibly by a criminal group,” said Indrasuwa, who has appealed to Prime Minister Pushpa Kamal Dahal’s office.

She says her husband had paid Rs3 million to a Malaysian named ‘Ms Yeoh’ to secure visas for his recruits, but she allegedly absconded with the cash. Rinji’s Malaysia-based brother Sobit Rai tried calling Yeoh many times, but she refused to take the call.

They finally got to Malaysia, but were left stranded by the Malaysian counterparts. Indrasuwa recalls her husband having a having a heated phone conversation two months before his death with Malaysian agents and Kuala Lumpur-based Nepali recruiters Shankar Acharya and Mahendra Jang Shah to clear up the issue. 

Her brother Dipak confirmed that Rinji had been getting threats from agents, who asked him to fly to Malaysia to settle the matter. 

“Just listening to that audio conversation provides clues to the intention of the caller,” Dipak told us.

Second Secretary Prem Thapa at the Nepal Embassy in Kuala Lumpur says the mission has taken up the matter with Malaysian Police who have said there is no sign of foul play. “The police are taking the case to court, and it will be decided there,” he added.

Nepali employers blame the embassy for certifying the recruitment company Star Domain (which brought Rinji Rai to Malaysia) and allowed it to get workers from Nepal even when it was known that it had been cheating workers before.

In 2021, when the ambassador post was vacant in Kuala Lumpur, the Labour Counsellor Dipak Dhakal had, despite pressure, rejected Star Domain’s recruitment application.

After Dhakal returned to Kathmandu in December 2022, the new ambassador Dilli Raj Poudel arrived and certified the recruitment application from Start Domain for 450 workers. The first batch of 300 Nepali workers who reached Malaysia earlier this year were stranded and jobless.

The dorm in Nilai housed stranded Nepali and Bangladeshi workers who had hoped to be rescued. But Rinji’s death proved to them that the labour mafia would go to any length to protect their scam.

Malaysian Labour Department officials and consular officers from the Nepal Embassy do not seem to have any answers. 

One Nepali worker who had been stranded for three months told Malaysiakini in June: “They just told us to be patient and everything will be all right. The agents in Nepal also told the us the same thing.”

Two months before Rinji Rai’s death, a Nepali worker brought in by the labour syndicate died at the dorm, but the cause was not disclosed. 

When migrant workers arrive to find that there are no employers and no jobs, it is a warning that recruiters are scamming them by pocketing their fees. 

To obtain Malaysian labour quotas, employers here  must prove to the government that they have a legitimate business and a need for the number of workers requested.

However, hundreds of workers are recruited under quotas obtained by using fake documents. Some of these fake permits are also traded, allowing Malaysian companies to sell the quotas, or rent out trafficked workers.

Just one syndicate involved a group of six companies which obtained quotas to recruit a total of 1,625 migrant workers for Malaysia’s services sector, many in cleaning, in 2022. But the companies had collectively applied for 4,000 workers.

In Nepal and Bangladesh, recruitment agents were told cleaners are needed for resorts in Genting Highlands. The prospect of working at the resort town meant many workers paid recruitment agents large sums to get the jobs.

One Nepali worker, Tilak, had once worked in a garment factory in Malaysia and applied to return, hearing that the job would be in Genting Highlands.

“Since I had lived in Malaysia for some time, I knew that work was good at Genting Highlands. We came to Malaysia with that hope,” he said.

The first batch of demand letters was sent to Bangladesh and Nepal in August 2022 and workers started arriving in batches from January 2023.

As they processed the workers who arrived, the workers bought warmer clothes for the mountains, but they never got anywhere near Genting Highlands. 

Malaysiakini’s investigation found that the company Star Domain Resources secured quotas to import 980 workers in 2022 by showing that it had already secured contracts for cleaning services, worth millions of ringgit. However, checks found the actual contracts do not exist.

Among them was a three-year contract worth RM2.85 million with Monash University Sunway Campus Malaysia Sdn Bhd. When contacted, Monash said it had no such contract with Star Domain . 

Old names

The syndicate also obtained IRB stamping for supposed contracts with fictitious companies, using the older names of companies, false addresses and false company registration numbers.

One company, Zouk Spa, did not exist at the address stated on the contract, and when contacted, its director Ow Kok Soon denied engaging Star Domain for a cleaning deal worth RM7.42 million.

The scam is so blatant that the perpetrators did not even try to hide what they were doing, like a RM2.27 million contract with OSK Trustees Bhd. A fictitious company registration number 00000-X was submitted, while OSK Trustees Bhd was bought over by RHB Trustees Bhd in 2013.

One of the companies, Maju Transport & Express Sdn Bhd, said to have contracted Star Domain Resources for cleaning services, said it had terminated the agreement.

Malaysian employers awarded quotas can reportedly sell them for as much as RM10,000 per head to brokers who sell them on to recruitment agents.

When a quota application is put in, the word is put out among agents, triggering a bidding war to secure the quotas even before the application is approved.

Brokers are said to pay deposits to the quota applicant for ‘demand letters’ which are then sold to recruitment agents in sending countries like Nepal and Bangladesh, even before the quota is approved.

Star Domain was awarded a quota of 980 workers but is alleged to have sold demand letters for more than 3,000 workers to recruitment agents in sending countries, according to documents sighted by Malaysiakini.

To convince the recruitment agents that the demand was real, the syndicate held job interviews with the prospective workers via Zoom, ordered cleaning services uniforms for them, and used a bespoke worker management IT system which the agents uploaded information into.

But insiders told Malaysiakini the agents and migrant workers were not the only ones duped.

The company’s Malaysian staff who conducted the interviews with migrant workers also were not aware that it was a con.

Kicking the cost down to the worker

Agents in sending countries usually pay a fee to the middle persons, which they later recoup from the workers who pay a recruitment fee via brokers to secure the jobs in Malaysia.

To afford this, workers in Nepal take multiple high-interest loans, believing they could recoup that from the noon-existent high-paying positions promised to them. 

If the agency agrees to buy the quota from an employer at RM10,000 per worker, the rate they charge workers will be twice that amount, plus an additional RM3,000 to compensate agents in the villages, industry sources told Malaysiakini.

The original quota bearers, however, just receive a one-off payment from the brokers, often in a duffle bag full of cash. When the workers arrive, they become cash cows that can be rented out to other companies.

Quota prices can also change according to country of origin as Bangladesh agents are able to extort more from their nationals, it is learnt.

Workers told Malaysiakini they are required to pay in cash and do not get receipts as proof of payment. If they raise questions, agents threaten to return their money and not arrange their passage.

Convinced of promises of potential high earnings in Malaysia, many desperate workers comply.

Labour outsourcing was outlawed in 2018, making it illegal for recruiting agencies to hire migrant workers under their name and deploy them to work elsewhere.The construction sector is exempted from this rule, but those found guilty of outsourcing in other sectors face hefty fines and, or imprisonment.

In recent years, however, cleaning services offer a loophole, making it the preferred camouflage for traffickers supplying workers.

Employers providing cleaning contracts are allowed to station their workers at a client’s premises as their cleaning staff for a contracted period.

But when they are at the client's premises, they may also be tasked to do other jobs, like waiting tables or kitchen duties or joining the assembly line at factories. This means once the workers are in Malaysia, they can be supplied to other companies without technically breaking the law.

From late January to March, a group of 166 workers arrived on a quota awarded to Aecor Innovation, one of the six companies in the syndicate. There were no jobs for them.

Twenty lucky ones were put to work as cleaners in February. The others started work in June. Just as things started to look up, in July, they stopped receiving their salary. They got nothing until September.

When met, they said even when they were paid, there were major deductions from their salaries for things like lodging, phone SIM cards and ‘advances’ - against labour regulations and their employment contract.

Their contract promised free lodging but the workers were charged RM100 each and crammed into a room of 10.

Their payslips did now show that social security payments (Socso) were made but that deductions were done for ‘demerits’.

“The slightest mistake is a demerit. I took my phone out of my pocket to look at the time, the supervisor took a photo and RM200 is demerited from my salary,” said one Bangladeshi worker, via a translator.

Workers’ wages were also deducted for “assistance” they received, when they were stranded and jobless, following the Human Resources Ministry’s interventions.

Apart from the RM500 they received in September as an advance, the workers were hungry and on the verge of tears for having to ask families to send them money just to survive.

The workers stopped work en masse at the end of September, even in the face of alleged threats from Aecor Innovation that their work visas would be cancelled and they would be sent home immediately, they told Malaysiakini.

On Oct 2, the workers lodged a police report against Aecor for alleging non-payment of wages and threats by the employer toward those who inquired about their months-overdue wages.

The workers claimed that the employer had even threatened to cancel their work visas and have them arrested and detained.

They also submitted a complaint to the Putrajaya Labour Department, pleading to be rescued from “hostage life”, seeking intervention to secure a new employer and demanding their back wages and reimbursement of recruitment fees of 450,000 to 500,000 Bangladeshi Taka (RM19,00 to RM21,000).

Despite their collective action, they remained anxious because being sent home before they could raise enough funds to repay their debts could have consequences as dire as death.

“If I have to return now, I will either murder my family and kill myself or be killed by those from whom I have borrowed,” said one worker.

“The only choice I have is how I will die.”

Malaysiakini sent questions to all the Malaysian companies mentioned in this report, seeking a response. None have replied at the time of publication.

The Immigration Department and Labour Department have also not responded to Malaysiakini’s queries.

Names of some workers have been changed. 

This article was a joint reportage by Malaysiakini and the Centre for Investigative Journalism, Nepal.