10. The New York Times reported in a news piece that most TVEs were sold to insiders. The reporter claimed that this is prima facie evidence that the process is corrupt. Do you agree? Explain. （Note:TVE -Town or Village Enterprise）
The Answer provided by the professor is as follows:
Selling to insiders was a natural process, since managers already had most rights to the firm in the mid-1990s, before privatization. They had superior knowledge of firm. The main problem to overcome was at what price to sell. This was done by offering a menu of prices and profit sharing terms. Therefore, it was not corrupt, just hard to do. [We should have taken off points if you had said that this was corrupt, but we did not]
But considering the attitude of 郞咸平, there is indeed some corruption in the process of privation of the TVE.
How about your opinions?
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