The nine men bared briefs sporting the Malaysian flag after Australian Daniel Ricciardo took out the Sepang Formula 1 Grand Prix.
"This shows a huge lack of respect to us as Malaysians; this is stupid behaviour from foreigners who have no sense of cultural sensitivity and respect," Sepang International Circuit chief Datuk Razlan Razali told the New Straits Times.
"They deserve to be locked up, investigated and taken action against. It embarrasses their own country as well - it gives Australians a bad name."
Sepang police chief Abdul Aziz Ali said on Tuesday the men aged between 25 and 29 were allegedly intoxicated when the incident happened on Sunday.
The group was now under investigation for public indecency and disrespecting the Malaysian flag.
They are believed to have been picked up after fellow race goers reported them to police.
Australia's Department of Foreign Affairs and Trade is providing consular assistance to the men.
Meanwhile, The Advertiser reports one of the men - named as Jack Walker - is an adviser to Minister for Defence Industry Christopher Pyne.
A spokesperson for Pyne said the matter is being handled by the Australian High Commissioner.
"Until we have a clearer picture of the process at hand it would be unwise to comment further," they told AAP.
