Although various governmental organizations including the central bank, the trade ministry and the attorney general's office have recently issued guidelines to protect debtors' rights, there is as yet no systematic revision of the law. From a cultural standpoint, Malaysian is divided between the overseas Chinese communities and the Malay community. The Malaysian Chinese share with other Chinese communities throughout Asia a strong cultural bias against bankruptcy. A strong emphasis is placed on informal workouts, social and family support systems and avoidance of social stigma. Also, like other Chinese enclaves there are a split based on the size of the firm.
Smaller businesses are far more likely to avoid liquidation than larger corporations.
The cultural values against liquidation are not as pronounced in the Malay community. The real detriment to use of the bankruptcy procedure has far more to do with the social and political connections of the debtor. Like Indonesia and China, political connections and influence will restrict the use of litigation and insolvency procedure far more that cultural inhibitions. Some of these articles are referenced in Professor Roubini of New York University Stern School of Business Administration Asia Crises Home Page and in the Providence Journal - Commentary Section 1.