By Lee Su Shyan

SINGAPORE Exchange (SGX) is making a special cash payment of $1.5 million to its former chief executive Hsieh Fu Hua in recognition of his 'outstanding contributions'.

But it is a separate conditional award of 436,485 SGX shares, worth a hefty $3.5 million based on the current share price, that is likely to raise questions.

On Tuesday, Mr Magnus Bocker took over from Mr Hsieh, who had been with the bourse operator since March 2003.

The SGX announced on Wednesday that it is making a $1.5 million payment and that it had also made a conditional grant of the shares to Mr Hsieh on Nov 30 under its performance share plan.

This grant comes with strings attached. Mr Hsieh must not engage in any business or activity that competes with SGX for a year from Nov 30.

It is up to SGX to determine if Mr Hsieh satisfies the condition.

If he does, he will get the shares, but only after three years from his departure date, that is Nov 30, 2012.

The former CEO of DBS Group Holdings, Mr Jackson Tai, was given $1.8 million on the condition that he did not join a competitor or poach DBS staff for six months.

However, the announcement of Mr Hsieh's award comes less than a week after he disclosed his post-SGX plans.

Last Thursday, he told media that he would return to PrimePartners, a boutique corporate finance firm he founded, after taking 'a short break'.

Mr Hsieh's links with PrimePartners became a controversy after a Dow Jones Newswires article in 2007 raised the issue of a conflict of interest.

The article referred to PrimePartners' announcement of a joint venture with plans to attract Chinese firms to list on London's Alternative Investment Market. Such a plan raised the issue of PrimePartners competing with SGX.

Mr Hsieh was in the spotlight as he still held a non-executive directorship with PrimePartners, as well as a stake.

SGX, for its part, said that Mr Hsieh had disclosed his directorship of the firm and his stake before he had joined.

Still, the controversy simmered and eventually, Mr Hsieh gave up his directorship and placed his stake in a trust.

This share award raises questions: If Mr Hsieh returns to PrimePartners within a year, would the SGX deem that a form of competition with the exchange?

If so, would Mr Hsieh lose his share entitlement? Or is his 'short break' intended to last a year?

Some observers suggest that a corporate finance firm such as PrimePartners is not really in competition with a bourse operator. SGX was unable to reply by press time yesterday evening.

Mr Hsieh's pay package for the year ended June 30, 2009 was $4.02 million.

This article was first published in The Straits Times.