An anagram of Enron is Renon; add a "G" -- and you have Malaysia's Enron: Renong. Mr Kenneth Lay's counterpart is Tan Sri Halim Saad. What drove both is the same "G" -- greed and government influence. An Enron happens in the United States once in a while, when the blatant political influence it had on the administration could not stave it from disaster. And it pays the price. Mr Lay is before Congress, he refuses to testify, under constitutional provisions that allow him to, but he faces the prospect of imprisonment for how the seventh largest US company collapsed in debt under his leadership.

In Malaysia, Renong and its linked conglomerate, United Engineers Malaysia (UEM), were given government privatisation projects without due diligence, and the two companies, who could have made billions out of it, ended up in unrepayable debt and bankrupt. Every project it was given ends is in debt or bankruptcy. The government rescues every one, retires the debts and hands the companies back to those who caused it to fail. Tan Sri Halim Saad took a personal loan in Hong Kong for US$800 million to buy the now bankrupt National Steel Mill in the Philippines admist negotiations in which he was involved for a Malaysian company to buy for it less than half. The venture collapsed. But the Malaysian government takes over that private debt for what turns out a scam. There is no uproar, even the opposition kept quiet.

Malaysia has more Enrons (or Renongs) in its corporate armour than it can handle. Every one is linked to the government. The special government agencies like Danaharta are created to rescue them and them alone, not the corporate sector at large. Only cronies of the establishment and their companies qualify. In the United States, there is at least an attempt to put matters right when a scandal like Enron throws the country out of gear. In Malaysia, no one, not even MPs would raise the matter. The government does not want it discussed. And so it is. Parliament is never told, let alone given the right to question, ministers about such financial disasters.

When Parliament never discussed the setting up of Putra Jaya, the new administrative capital, because it was built by an off-budget agency, Petronas, why should it discuss a commercial disaster even if it has links with the government? The ministers involved get amnesia when asked about it, and with a press that dare not question -- especially when every one of the mainstream press is owned or controlled by one or other component member of the National Front, political and corporate opennes is for the birds in Malaysia.

Renong is a government favourite. It took over the assets of Hatibudi, the UMNO investment company. It is in the financial empire of the recently-resigned UMNO treasurer and federal finance minister, Tun Daim Zainuddin, though it is generally said to be an UMNO corporate vehicle. It could not have run at a profit the only canteen in a government department where thousands work. Yet it was given more and more valuable contracts for no reason than to make sure it turns a profit. It failed every time. The government had to spread the largesse. So, the cronies, courtiers and children of the Establishment got the scraps, which they lost heavily.

The three Mahathir children, for instance, rose to the heights of Malaysia's corporate world, racked up billions in debt which they could not repay, but bailed out with official help. The Vincent Tans, the Ting Pek Khiings, the Eric Chias, the Wan Azmis, the Amin Shahs, the al-Bukhairys, the Francis Yeohs survive only as cronies, and depend on government rescue where it matters while they build empires of debt. And let the Malaysian government take care of the downside and rescue these failed Malaysian Enrons. The listed companies are but shells, with debts far exceeding their net worth. Debts of billions of ringgit with no means to repay is strewn in their balance sheets. Enron, after all, is a company with US$66 billion in assets.

What caused the disasters in Washington and Kuala Lumpur is the greed which drives modern life. Greed drives respectable auditing firms, lawyers, business men to throw caution to the winds. The fees they generate is more important than the due diligence they are paid to do. When a major foreign accounting firm qualified the accounts of the Berjaya Group, its principal shareholder, Tan Sri Dato' Seri Vincent Tan, promptly changed the auditors. It sent a warning to all auditing firms, who then audited the accounts as the paymasters wanted. With greed comes government influence. In Malaysia, that government influence is seen in the regularity with which it passes money-making enterprises and opportunities their way. And rescue them when they run into trouble.

In the US, the companies with a line to the political leaders have a respectable record of products and business; to grow bigger they depend on political influence to grow bigger and expand their foreign business. If it is known that the President calls the Enron chairman 'Kenny Boy', which US ambassador would put his job on the line and refuse to lobby for the President's friend. As many Malaysian ambassadors will tell you, they face this predicament whenever a crony business man comes into town. Some have had their careers blighted when the visiting cronies decided the ambassadors did not take them seriously. What drove Mr Kenneth Lay and Tan Sri Halim Saad (and his ilk) is pure, unadulterated greed.

When money came with the ease it did, it made them want more. Soon the rules were brushed aside and the only concern was the money in their pockets, and let the shareholders and workers face the wall as the companies sank into unrepayable debt. The individuals in Enron and Renong and every company run on greed are wealthy men and women; the companies they ran and their shareholders take a bath.

The corporate and legislative culture is different in Malaysia and the United States. But they are linked by the same insatiable greed which caused the trouble. So Malaysian newspapers comment on the Enron affair with a belief it would not happen here, they are right: the government would not allow it to happen. If it did, its culpability would writ large. And the laws used to muzzle the whistleblowers and those who dare question. No, an Enron could not happen in Malaysia; it would be well covered up, and the government would ensure its debts are absorbed by the public purse, and it would given further opportunities to run into debt it cannot repay. If Mr Kenneth Lay had been Tan Sri Kamaruzamman Lay Abdullah of Enron Berhad, crony extraordinaire of the prime minister or Tun Daim, he would not be in the predicament he is in today.

M.G.G. Pillai
pillai@mgg.pc.my