“We will form a committee to study and review whatever terms that were agreed to previously,” Housing and Local Government Minister Zuraida Kamaruddin told a press conference on Tuesday.
She added: “We will engage with all the agencies involved and also the developer; then we see what is the best way forward.”
Since returning to power after his opposition coalition won the majority of seats in the Malaysian General Election in May, Mahathir has been trying to pull out of several costly China-backed projects, including a major rail link that costs $20 billion.
His latest comment about the ban on foreign investors caused Forest City’s Hong Kong-listed Chinese developer, Country Garden, shares to fall as much as 3.5 percent in early trade on Tuesday.
The prime minister’s office also issued a statement on Tuesday that said foreigners who buy properties in Malaysia do not automatically qualify for residency in the country.
Mahathir’s office did, however, state: “The government reiterates that it welcomes foreign direct investment that contributes to the transfer of technology, provides employment for locals and the setting up of industries.”
Although the statement did not specifically single out Forest City, the project has largely drawn the attention of Chinese nationals looking to relocate via the Malaysia My Second Home (MM2H) programme, which offers foreigners long-stay visas of up to 10 years.