Sixteen of the 18 most recent Scottish Edge awards were given to outfits under the wing of Entrepreneurial Spark (ESpark), whose chief executive, Jim Duffy, helped create the shortlist.
Run by jobs quango Scottish Enterprise of behalf of the government, the Edge is a Dragons' Den-style competition for budding wealth creators. A £2 million pot has been made available for a scheme that has seen two rounds of awards, in February and June this year.
However, although the competition has been praised in the business world, questions are being asked about the role of ESpark.
The organisation is a publicly funded social enterprise set up in 2011 to help business start-ups get off the ground. The fledgling firms are given free office space, internet access and IT use, as well as mentoring. More than 150 firms have benefited from ESpark's expertise.
The aspiring entrepreneurs are based in one of the ESpark offices, described as "hatcheries".
ESpark's primary business sponsor is Royal Bank of Scotland, but was also helped by tycoon Willie Haughey and has received £340,000 from local authorities.
In the latest round of Edge awards, 217 applications were made, with only a minority of entries from ESpark "chiclets" - the name given to firms on Duffy's programme.
Duffy and four other organisations - including RBS and Scottish Enterprise - were then part of a shortlisting panel that whittled the entries down to 60 hopefuls. Duffy was also on the regional panel which reduced the 60 semi-finalists to 30, who went on to compete at RBS headquarters in June. However, he was not on the judging panel on the final day. Of the 30 selected for the final, more than half were ESpark chiclets. Sixteen of the 18 cash prizes were awarded to ESpark outfits. Of the £704,000 given to the winners, nearly 90% went to start-ups nurtured by Duffy's organisation.
This included £50,000 for Log Six Systems, a healthcare venture formed by Stephen Roberts, a disqualified company director.
Roberts is a former bankrupt who was described by a judge as "evasive and devious" in a 2011 tax case.
After the awards were announced, ESpark blogged: "We are delighted to say 16 of the 18 companies are Entrepreneurial Spark Chiclets with £618,284 of funding brought to our Hatcheries #WOW."
Duffy is also involved in the next round of awards.
"Really looking forward to working with fellow #ScotEDGE judges", he tweeted earlier this month.
In August, it was revealed that ESpark chiclets had to sign an agreement promising not to criticise the organisation.
It stated: "Upon termination of this agreement the occupant agrees not to engage in any negative media whatsoever in respect of ES."
The revelations about Duffy's involvement have raised questions about whether the Edge selection process is fair.
Scottish Conservative enterprise spokesman Murdo Fraser said: "I am sure Jim Duffy would not favour any of the entrepreneurs with whom he has a personal connection, but Scottish Enterprise should see the dangers of a perceived conflict of interest."
SNP MSP John Wilson said: "Where public funding is concerned in awards of this nature there must be transparency and openness in the process."
Eleanor Mitchell, director of commercialisation at Scottish Enterprise, said: "All applicants for the Edge programme went through a robust selection process … The panel did not take into account any previous or existing relationships they had with any of the project partners."
Duffy said: "I am one of five members on the panel, with all decisions regarding entrants needing to be approved by all of us, and I do not take part in the final judging process. The success of ESpark's start-ups to date in the Edge competition is testament to the hard work which my team puts in."