THE chief executive and three other senior officials have been suspended at Scotland’s largest council jobs quango as police were brought in to investigate the alleged misuse of EU funds.

Glasgow City Council has used emergency powers to suspend Jobs and Business Glasgow (JBG) chief executive Calum Graham, as well as Mary-Theresa Smith, Nancy Burns and Rob Pryce.

The action follows the result of an internal audit, details of which have now been passed to Police Scotland.

There are fears the quango, which has helped tens of thousands into work and training in its short history, would face bankruptcy if any impropriety is found.

The organisation, which was known as Glasgow Regeneration Agency until a relaunch in 2013, has received about £4 million in EU funding.

It now faces the prospect of paying all or some of that sum back after a routine audit by the Scottish Government in late 2015 found discrepancies in how the monies were accounted for. However, the city council said there was “no evidence of personal gain”.

It is understood Mr Graham was suspended largely because of his position and the need for oversight of the operation.

Ms Smith is the organisation’s head of employability, Ms Burns, head of youth and learning, and Mr Pryce is head of enterprise, business and the economy.

The council said it had instructed the JBG board to suspend four senior managers, including the chief executive, and to appoint an interim chief executive from Glasgow Life. It added that it had referred the findings of an investigation by the council’s head of audit and inspection to the police.

It used its emergency powers to instruct directors to act “in order to protect the stability of the company, its workforce and the service it provides”.

A spokesman said: “This is an action we felt we had to take to protect the company, its staff, and the services they deliver for hundreds of clients.

“While we have seen no evidence of personal gain, it is vitally important that the rules around European funding are complied with to the letter.”

Jobs and Business Glasgow is currently chaired by Labour councillor Maureen Burke, who has only been in the job several months. It has a cross-party board of directors and was created by merging five local regeneration companies across the city.

It is funded by organisations including Skills Development Scotland and Job Centre Plus as Glasgow's main provider of apprenticeships.

It claims that in the 2014/15 period it engaged with over 16,000 unemployed city residents, supported over 3500 into work, assisted more than 7500 into training and helped 500 people to start up a business.

It is one of raft of organisations across Scotland whose European funding has been suspended following an audit or review, with the potential claw back by Brussels running into tens of millions.

One source said: "The sad thing is there were much better outcomes from JBG in recent times. But the rules are the rules and while there's no evidence of pocketing the cash there was enough for the council to pass to the police."