Shares as payment

Sentosa being changed

On Aug 13 and 14 in the Business Times, Jamie Lee reported that PrimePartners, a Catalist sponsor, received 7.56 millions Healthway shares for helping Healthway get listed on Catalist.

The question here is whether it is all right for Catalist sponsor to receive the shares as compensation. I wish to present the pros and cons for your decision.

Yeo Lian Sim of Singapore Exchange said it is ok for the following reasons:-
a) Catalist sponsors are of so high a standard and with so good track record that they have an independence of mind not to be tainted and tempted by the 7.56 millions.
b) It is ok for the sponsored company to pay in kind so as to allow them to conserve cash to fund their business.

PrimePartners said sponsors receiving shares is not an uncommon practice. It is practiced in London's Alternative Investment Market.

The Cons:-
a) What would or could happened to the minority shareholders when the sponsor decide to sell the 7.56 millions shares in one shot? (concern of overhang or sudden deluge of shares)
b) There could be an overriding desire to put up a "good" show to ensure the shares get a good price by over emphasing the positives and relatively quiet on the negatives. (lack of independence and professionalism)

My final question here
If it is all right for Catalist sponsors to receive shares as payment, will SGX approve other professionals like lawyers, accountants, auditors etc (who are also involved in the process) to get compensated in the same way?