COMPANIES in which Scottish Enterprise chairman Crawford Gillies owns shares have received millions of pounds of investment from the publicly funded economic development agency, a Herald investigation has revealed.

The revelations have prompted criticism and raised questions over whether a senior official should have a stake in a business which is receiving state backing.

On his register of interests for Scottish Enterprise Mr Gillies lists several companies which he has stock in which could "bear upon the work or operation" of the body. But the register makes no reference to the public money these firms have accessed since Mr Gillies joined the agency in February 2009.

The most recent example came this month when dental technology business Calcivis raised £800,000 from the Archangel Informal Investment syndicate and the Scottish Investment Bank, the investment arm of Scottish Enterprise. That followed on from £1.2 million the business secured in 2012. Calcivis's most recent annual return, dated July 13, 2013, shows Mr Gillies has 32 ordinary shares.

Among the other businesses which have received substantial backing through Scottish Enterprise schemes and in which Mr Gillies is listed as a shareholder are laser company Powerphotonic and infrared sensor specialist Pyreos.

Pyreos, based in Edinburgh, raised £2.5m in November last year from investors at Robert Bosch Venture Capital, Seraphim Capital, Siemens Technology Accelerator and the Scottish Investment Bank. Pyreos had already raised more than £2.35m between 2009 and 2011. On the most recent Pyreos annual return, dated August 5, 2013, Mr Gillies is listed as having 13,500 ordinary shares. The annual return dated July 20, 2010, shows 13,500 A1 ordinary shares held under Braveheart Nominees with the abbreviation CSG. Mr Gillies' middle name is Scott.

Powerphotonic raised £550,000 of funding in September 2012 through Tri-Cap, Archangel and the Scottish Co-investment Fund with a further £650,000 from the same investors following in October last year. At Powerphotonic Mr Gillies is listed on its annual return dated April 27, 2013 but not on the one for May 2012.

Patrick Harvie, co-convenor of the Scottish Green Party, said: "Most people would have expected a secure 'firewall' between the Scottish Enterprise leadership team and share deals involving the companies they give taxpayers' money to.

"It's disturbing to learn that this isn't the case, and there's a clear need for Ministers to challenge the organisation on the ethical issues involved.

"This week the Greens have held a debate at Holyrood about the chronic problems of wealth and income inequality, and it's a very relevant time to ask what Scottish Enterprise can do to oppose the culture of greed and excessive pay which has done so much harm to our society."

Mr Gillies is also a shareholder in the likes of microchip tester Ateeda, software firm Ciqual and life sciences business Vascular Flow Technologies which have all benefited from hundreds of thousands of pounds of publicly funded investment support. In Scotland a co-investment model is often used to raise funds for promising businesses. This typically involves the Scottish Investment Bank putting up 50% of the cash alongside private sector investors. It has been suggested the model helps encourage private investors as they put in less money initially and feel greater security by working with a public agency.

While the exact value of Mr Gillies' shareholdings is not known he could benefit by selling the share or if any of the firms starts paying dividends or gets acquired.

Scottish Liberal Democrat leader Willie Rennie said: "People need confidence that there is distance in the relationship between the public money being spent and any personal financial gains. Nobody should have undue financial gain from public money. It begins to look too cosy for the insiders."

It is a further controversy for Scottish Enterprise following on from criticism over the decision to allow chief executive Lena Wilson to take a non-executive director role at Intertek in July 2012 for which she is paid around £60,000 annually on top of her £200,000 Scottish Enterprise salary. There were also concerns that Intertek had previously received grants from Scottish Enterprise.

Mr Gillies receives a fee of £38,721 to be Scottish Enterprise chairman. He is expected to get around £150,000 to head the Barclays remuneration committee on its board, after being appointed last month. He is also on the board at Standard Life and Mitie.

A spokeswoman for Scottish Enterprise said: "The chairman is an experienced non-executive director who is committed and dedicated to supporting young growing Scottish businesses and the majority of these shareholdings were acquired prior to him taking up post.

"We have very robust systems in place to avoid conflict of interest and to ensure absolute transparency when it comes to investing public funds. Consequently he has never had any involvement in decisions to invest in companies in which he has a stake."