Few dare to flutter at the Kuala Lumpur Stock Exchange, where sentiment is masked by high volume in the last few minutes of trading for the day. There, three shares are controlled by the government - Telekom, Tenaga, Malayan Banking - and represent about 35 percent of the weightage of the KLSE Composite Index.

It is enough to move the index, but not enough to reverse the decline. Investors cannot see why they should enter the market to be 'burnt'. Bears batter bulls to dominate, helped by official ill-thought-out schemes to rescue and nurture bankrupt cronies of the establishment so brazen that revulsion results when it is announced.

This is so serious that the finance minister, Daim Zainuddin, answers questions in Parliament over two days to justify the unjustifiable. He had treated MPs with contempt, ignoring their questions or refusing to explain his actions. He cannot now. Barisan Nasional MPs now demand answers.

Which is why Daim answers parliamentary questions himself, and the newspapers publish his full reply. However, he does not convince; he waffles, is defensive, nor does he explain. The danger is that since follow-up questions are tightly controlled at question time, he will be ignored by his own side. That can only add to his, and the government's, discomfiture.

Golden share

At the centre of the current storm is the bailout of a Daim protege, Tajuddin Ramli, whose 29.03 percent stake in MAS the government bought at about twice the market price at an indefensible RM8 a share.

Daim does not explain why it had to pay nearly RM2 billion when it could have bought the stake on the open market for half this, or why it needed to buy it at all when its 'golden share' gives it a controlling stake in how MAS is run. That he did after the Sultan of Brunei's stake in MAS was acquired at RM4 is viewed with distaste in the sultanate.

What frightens is that this is bought at a time when the country does not have the funds to rescue failed companies, nor to fund the hundreds of billions of ringgit worth of projects announced. Malaysia's foreign reserves have fallen sharply. Add to that the tens of billions of foreign exchange loans Malaysian businessmen borrowed in foreign currency that they cannot now repay.

The one source of seemingly never-ending funds, the state-owned oil company Petronas, is so overloaded with dud companies and such projects as the development of Putrajaya and compromised by selling its petroleum production forward to Taiwan two years ago. Since then the oil prices have risen, but Petronas cannot benefit from that though Taiwan does. If we are not careful, Petronas can go the way of Pertamina.

Daim's explanation in Parliament that Tajuddin Ramli's stake was bought to protect Malaysia's interest has been greeted with disbelieve and shocked yawns. What is unmentioned, not in Parliament anyway, is that almost every major company and businessman bailed out, such as Time dotCom, are apparently linked to Daim himself.

Malaysians and investors, local and overseas, therefore view the bailouts as involving almost wholly companies linked to Daim. It does not matter if it is or not, but market perception gives ultimate control of such companies as Renong, UEM, Plus and every major privatisation to him.

A widely held view in the marketplace is that this shifting of assets, to not put a fine point to it, reflect an unmentionable pattern, with the ultimate owners cashing in. Otherwise, why is Petronas considered a potential buyer now of MAS - which, to be fair, Petronas wants nothing to do with, at least not now? It explains, if that is the correct word, why the government bought a chunk of MAS shares from a crony rather than in the open market.

Special treatment

When inefficient, debt-stricken, bankrupt, privatised companies are bailed out, a rule of thumb would return them to the management that brought them to their knees in the first place after the debts and losses are hived off. When the stock market is buoyant, no one cares if velvet purses can be knitted from sows' ears. It does not make it right, but when everyone makes money, no one cares if short cuts are taken unfairly. Now with suspicions and losses staring one in the face, every one does.

When the government is in limbo, as now, unable to govern because it is disbelieved, the people increasingly angry at this deliberate campaign against those the government does not like, such attempts at bailing out cronies would be challenged.

The Time dotCom share issue was seen, in the market, as an attempt to cash in on investor gullibility. It would no doubt have been oversubscribed if the underlying basis of it was not as questionable and challenged. It bombed. Daim said the government pension fund, as a sub-underwriter, ended up owning a chunk, while the main underwriters did not, is mischievous. And with good reason.

The government had deliberately evaded explaining its actions to Parliament. So, when Daim decided to 'come clean' about the bailouts and why it bought MAS shares at RM8 a share, other considerations clearly forced him to. He is, without doubt, the most powerful man in Umno and the government. He is always treated with kid gloves, and has control of economic policy and finance by virtue of the two portfolios he holds - finance and minister without portfolio in the Prime Minister's Department.

Daim would now have to be more forthcoming in the sessions of Parliament, and explain his actions. His party realises that if he does not, Umno itself could be buffeted in the political gale storms that may break out. Unless more convincing explanations emerge about the bailouts, in Parliament and elsewhere, Daim, and the government with him, is in for a rocky ride.