"A wooden boat with 97 Indonesians has sank off Port Klang near Banting," Mohamad Zuhri, spokesman for the Malaysian Maritime Enforcement Agency (MMEA), told AFP, adding that 31 had been rescued after the overnight disaster.
"The Indonesians were trying to enter Malaysia illegally by crossing the Malacca Straits," he said, referring to the busy shipping lane between Malaysia and Indonesia's Sumatra island.
The boat sank not far from shore, offering hope that more survivors might have made it to land, said Mohamad Hambali Yaakup, head of the MMEA office at Port Klang, Malaysia's main port.
Authorities said five vessels and a helicopter were searching for survivors.
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Relatively affluent Malaysia, Southeast Asia's third-largest economy, is a magnet for migrant workers from poorer neighbours such as Indonesia, Bangladesh, and Myanmar.
Around two million illegal immigrants are estimating to be working in the country of 28 million people.
Accidents are frequent as thousands annually risk the sea journey in rickety boats to seek low-paying work -- typically shunned by Malaysians -- on plantations, construction sites and in factories.
Indonesians -- by far the most numerous among the arriving illegal migrants -- often add to the risk by choosing to cross the Malacca Strait under the cover of darkness to avoid detection.