The criteria for awarding a scholarship
What are the criteria for award of the scholarship? Is it stated that, say, children of employees will receive preference? Employers may create special scholarships for the children of employees (as a benefit to employees) just as some universities give tuition waivers for children of their employees.
If the stated criteria for award of the scholarship do not match the criteria actually used, there is something wrong.
For a conflict of interest to occur the individuals making the award would need to have an interest or loyalty that conflicts with using the stated criteria. (They would not need to have made their choice on the basis of that conflicting interest or loyalty to have the conflict of interest.)