UPDATE: A staffer for Defence Industry Minister Christopher Pyne is among a group arrested after they stripped down to swimmers emblazoned with the Malaysian flag at Sunday's Formula One race in Kuala Lumpur.

Jack Walker is pictured with a group, nine of whom, aged between 25 and 29, were arrested about 5:00pm (local time) on Sunday while watching the grand prix, won by Australian Daniel Ricciardo, at the Sepang International Circuit.

A spokesperson from Mr Pyne's office told the ABC: "This matter is being handled appropriately by the Australian High Commissioner. Until we have a clearer picture of the process at hand it would be unwise to comment further."

The ABC reports the men, aged between 25 and 29, were arrested about 5:00pm (local time) on Sunday while watching the grand prix, won by Australian racer Daniel Ricciardo, at the Sepang International Circuit.

Pictures of the incident were posted on social media by fellow spectators. Their pictures showed the group holding up an Australian flag, while wearing the Malaysian-themed underwear with the words "Budgy smuggler" across the back.

Video from ABC News also shows them drinking beer out of their shoes.

Sepang Police chief ACP Abdul Aziz Ali said the Australians were being remanded for four days from Monday and were being investigated for indecent behaviour in a public place and disrespecting the national flag, according to Malaysian reports.

Chief executive officer of the Sepang International Circuit Datuk Razlan Razali told New Straits Times the Australian men deserve to be "locked up, investigated and taken action against".

"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.