The idea for the Catalist sponsor to take shares in lieu of cash payment for their professional fees is not a potential conflict of interest, but a confirmed one.
How could a sponsor keep watch over a listed company when they are the shareholder of the same company?
Those company whose simply too small to afford the sponsorship fees and continuing fee shall think twice before taking public listing as an option.
It is laughable that some was quoted as suggesting to has another independent continuing sponsor to work with the prime sponsor. If an entity is so poor to afford a sponsor, how could they afford the second one?
The sponsorship system for Catalist, the Singapore Exchange's (SGX) platform for smaller firms may require a review to patch the loop holes.
Reference Post from Business Times
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