Singapore is working with Malaysian authorities to investigate claims that bogus employment agencies are duping Malaysians working in the city-state.

"If they flout the law, action will be taken against them," Singapore's ministry of manpower told the Star newspaper in a statement issued through its high commission (embassy) in Kuala Lumpur on Saturday.

The ministry was responding to the newspaper's report last Sunday that claimed Malaysians were being duped by illegal labour recruitment agents who were luring them to the city-state with false promises of lucrative jobs.

Many have been stranded and unable to return home as the agents hold on to their passports as collateral until their "bonds" of up to RM7,000 have been paid off.

Appalling working conditions

The ministry said labour agencies in Singapore were aware that the law prohibited them from retaining the passport or work permit of any foreign worker.

"However, to secure a job in Singapore, they had agreed to pay a sum of money to their Malaysian employment agents," the ministry's statement said, according to the Star .

"Many of them had consented to their passports being withheld by their Malaysian agents as collateral," it added.

Victims claimed they were abused and subjected to appalling working conditions. They were mostly labourers from Sabah and Sarawak.

Many Malaysians, especially in Johor, flock to the city-state to seek employment and the prospect of better wages.