The black-and-white flag, which some social media users mistakenly identified as a Taliban flag, bears the Kalimah Shahadah (affirmation of faith).

Concerns over the flag came after a 16-second video of several youths riding on horses in the Penang street went viral.

The horse riders were seen waving several flags, including those bearing the PAS and Perikatan Nasional logos, as well as the Kalimah Shahadah.

In a statement, Penang police chief Shuhaily Zain said the investigations revealed that none of the flags was linked to any terrorist or extremist organisation.

Shuhaily warned members of the public against speculation that could create unrest.

He said investigations can be carried out under Section 504 of the Penal Code for intentional insult and Section 233 of the Communications and Multimedia Act (CMA) 1998 for improper use of network facilities.

Those convicted under Section 504 of the Penal Code face a two-year maximum jail term or fine or both, while those found guilty under Section 233 of the CMA can be jailed for up to two years or fined up to RM50,000 or both.