The Daily Mail reported Shell engineer Adrian Chesters, 46, and Nathen, 14, a Dutch national, were part of a group of four people who went diving off the tiny island of Pulau Tokong Sanggol on Wednesday when their skipper returned alone to port.
The captain made a statement to police in Mersing, a coastal town on the Malaysia Peninsula's southeastern tip, but was later arrested after a urine sample revealed he tested positive for methamphetamine.
Mr Chesters had only just relocated his family to the tourist spot after working as a senior engineer on Shell's Appomattox rig in the Gulf of Mexico.
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Kristine Grodem, the group's instructor, was rescued 30 nautical miles from where she and her fellow divers had become stranded on Thursday.
Mr Chesters and his son remain missing, as does 18-year-old student Alexia Molina, of France.
Hopes of rescuing the trio are dwindling as dozens of divers, vessels, and over 90 officials scour an area covering more than miles.
Captain is being investigated
According to officials, the quartet was in the water for 40 minutes and 'failed to return after undergoing a diving exercise’.
The captain is being investigated under Section 15(1) of the Dangerous Drugs Act 1952, according to police, who are assessing the dive equipment and location.
Mersing police chief Superintendent Cyril Edward Nuing said the divers could not see their boat when they resurfaced, and they ended up drifting in strong currents.
"The instructor tried to keep all of them together but they got separated," he said.
Local officials had suggested they were confident the three missing people would be found because they were 'experienced divers'.
The Foreign Office has reportedly confirmed that it is still in communication with Malaysian authorities.
A search comprising coastguard, police, and fisheries department boats began at 2.45pm (6.45am GMT) on Wednesday.
Grodem was discovered by a tug boat in the waters off Tanjung Sedili in Kota Tinggi at 8.15 am (2.15 am GMT) 'floating and fully equipped' with her diving gear and is said to be in stable condition.
The rescue operation was postponed at 7.30pm local time on Wednesday due to poor visibility, amid bad weather.