Malaysian Police say that the tanker was carrying 131 Sri Lankans headed for New Zealand and Australia.
He said the worldwide syndicate, which covered Sri Lanka, Australia, New Zealand, Indonesia and Malaysia, had been operating since the middle of a year ago.
Three Indonesians and four Malaysians who were on a fishing boat which was believed to have been used to ferry the immigrants to the tanker, were also arrested.
"With these arrests, the Royal Malaysia Police has successfully foiled a large and cunning human smuggling syndicate", said police chief Mohamad Fuzi Harun.
Australia's Border defense Minister Peter Dutton told reporters on Monday that Australian police were dealing with the Malaysians to protect against the boat reaching Australian or New Zealand.
A total of 127 Sri Lankans will be charged for entering Malaysia illegally while nine Malaysians, four Indonesians and four Sri Lankans will be investigated for people smuggling, he added.
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Four Sri Lankan men were arrested aboard the tanker for suspected involvement in the trafficking network.
He said that the act was not tolerated by New Zealand and the exploitation of the individuals on board was repugnant.
He's adamant "New Zealand is now being marketed as a definite destination".
A spokesman from the Australian Department of Home Affairs said the incident showed the "enduring threat that people smuggling poses across our region". "I've seen nothing credible to say that is possible", said Andrew Little, Minister responsible for intelligence agencies the GCSB and the SIS, at the time.
He warned a pathway for refugees to settle in New Zealand could put "sugar" on the table and kickstart the people smuggling trade.