PUBLIC sector watchdog Audit Scotland is starting its annual examination of Scottish Enterprise this week and has promised to scrutinise the corporate governance of the publicly-funded economic development body.

The Herald recently revealed Scottish Enterprise's chairman Crawford Gillies holds shares in several companies which have raised millions of pounds of funding through its investment arms.

That prompted criticism from politicians, business representative groups and the Scottish Trades Union Congress.

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However, the Scottish Government have stated their confidence in Scottish Enterprise's governance and in Mr Gillies. Scottish Enterprise also defended its position, saying it had robust procedures in place to avoid conflicts of interest and ensure transparency.

Mr Gillies, formerly a management consultant at Bain & Co, is also a non-executive director at Standard Life, Mitie and Barclays. He has been at Scottish Enterprise since February 2009.

An Audit Scotland spokeswoman said: "Audited bodies are responsible for ensuring that they have arrangements in place for implementing and monitoring compliance with standards and codes of conduct, standing orders and financial instructions. Auditors consider whether bodies have adequate arrangements in place.

"No issues were identified in our 2012-13 audit concerning corporate governance and systems of internal control."

Scottish Enterprise attracted criticism in 2012 after letting its £200,000-a-year chief executive Lena Wilson accept a non-executive director post with Intertek. Ms Wilson receives a fee of around £60,000 for the part-time role.