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Prudent money management requires regular and accurate accounting. This is true for both private and public sectors. Money not only 'makes the world go around', it is also an incentive to commit fraud and theft. Independent accountants, who prepare accurate and detailed reports of money transfer between accounts, provide necessary information to evaluate management and guide investment decisions.
The decision to commit new funds for investment has risk. Where no information exists, investment equates to giving money to strangers promising dividends and capital gains unsupported by written documentation or independent audit. Under these conditions any declaration of unencumbered assets requires faith.
The worst of the Malaysian financial crisis is two years old. Despite repeated entreaties, no perceptible progress is apparent among Malaysian companies or public agencies to provide audited quarterly reports of business results either to shareholders or potential investors.
This failure to respond after stern warnings from international fund managers and now the US Secretary of State has led to a dampening of interest and a general perception that much is being withheld about the public/business sector in Malaysia.
Malaysians may gamble blindly on local stocks and bonds. To expect others to participate in the economic activity of a country failing to cooperate at acceptable international standards of accounting is unrealistic.
The peculiar Malaysian claim that bribery was 'the custom' and thus an established [and acceptable] part of 'the Asian way' had a hearing. Today, however, the commingling of funds between government and private accounts is viewed not as 'Asian,' but as a misappropriation of funds, whether from the public purse or the private shareholder.
The absence of regular auditing, and the secrecy surrounding money transfers, weighs heavily on both the Malaysian government ministers [who are often very active participants in business affairs] and private companies, both listed and unlisted.
Recent changes in rules governing listing of profitable subsidiaries, accompanied by extended and new unchallengable powers of government agencies to subject troubled companies to takeover and 'special administration' increases perception of anticipated manipulation. Capricious changes in the policy of government participation versus allowed foreign investment in strategic industries further undermines confidence.
Until there is evidence of forthright and honest intent in the presentation of business information, there is little to recommend in the Malaysian investment scene.