A Glasgow Labour councillor was charged last week in connection with alleged offences relating to embezzlement.
However, Yvonne Kucuk was “liberated from custody” 24 hours later and the case remains live. She has also been suspended by her party.
A man, 54 year old William Faulds, was also arrested.
In a statement released to this newspaper on Friday, a Police Scotland spokesperson said: “On Thursday 12 May 2016, a 54 year-old man and a 49 year-old woman were arrested in connection with alleged offences relating to breach of trust and embezzlement. A report will be sent to the Procurator Fiscal.
“The 54 year-old man was released on an undertaking. The 49 year-old woman has been held in police custody ahead of a court appearance.”
Hours later, a spokesperson for the Crown Office said: “The Procurator Fiscal at Glasgow received a report concerning a 49-year-old woman in connection with alleged incidents said to have occurred between 1 April 2015 and 25 January 2016.
“The accused was liberated from custody and did not appear in court. The case against her remains live and under consideration.”
Kucuk, 49, was elected in 2012 to serve the Calton ward, an area marked by deprivation and unemployment.
As well as being a councillor, she played a key role in a £5.5million Commonwealth Games legacy project.
The Dalmarnock Hub, which provides childcare and health facilities under one roof, was funded by the Scottish Government, Big Lottery Fund and Clyde Gateway.
The city council also provided land at a peppercorn rate to the People’s Development Trust, which runs the project.
Its gala opening last year was attended by football legend Kenny Dalglish, senior councillors and a Scottish Government minister.
Kucuk had the £35,000 a year role of “regeneration manager” at the trust, but she is no longer in post.
The councillor did not respond to this newspaper's email.
A Labour spokesperson said: “Yvonne Kucuk has been suspended from the Labour Party pending the outcome of her case.”
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