Ian Craig, one of the highest paid public officials in Scotland, has been the subject of a grievance procedure following complaints by three fellow directors.
It comes amid concerns about his abrasive management style and claims he failed to consult colleagues over major decisions.
Today it has emerged the chairwoman of Lothian Buses, Ann Faulds, has carried out an investigation into the complaints which cleared Mr Craig of any wrongdoing.
But she must now work to heal the divisions between Mr Craig and the directors – who all work for Lothian Buses – in a bid to rebuild their working relationship.
The three executive directors who jointly lodged a formal grievance about Mr Craig’s conduct include operations director Bill Campbell, engineering director Bill Devlin, and finance director Norman Strachan.
All four men also occupy key roles on the board of Transport for Edinburgh – the umbrella body that oversees public transport links in the city.
It is understood Mr Craig was forced to step back from his duties at Lothian Buses until the probe concluded. Sources have spoken of his absence from the firm’s Annandale Street headquarters and depot over the last few weeks.
It is understood Transport for Edinburgh board members – including Mr Craig and city leaders who sit as non-executive directors – will be updated on the conclusions of the investigation at a summit due to be held today. The investigation is understood to have lasted five weeks and concluded a fortnight ago.
But at yesteday’s full council meeting, council leader Andrew Burns ducked a question about the Transport for Edinburgh boss, claiming he could not comment on a “live personnel issue”. Tory councillor Jason Rust, who challenged Cllr Burns to reveal what he knew about the probe, said it was “astonishing” the city leader “could not confirm the status of the position at present”.
He said: “This is a major role and the Edinburgh taxpayers and public, and not least the company employees, have a right to know who is in charge and what is going on and if this is an isolated matter or part of a bigger crisis.”
In recent years, Mr Craig hit the headlines when details of his huge pay packet were revealed. It showed his £270,000 salary dwarfed those of Prime Minister David Cameron and Scotland’s First Minister Alex Salmond.
Officials initially refused to disclose his pay cheque – which included a £73,438 bonus in his first year – when the inquiries were first lodged following his appointment.
The three executive directors who registered a grievance against Mr Craig were each paid just under £190,000 in 2012, including bonuses.
Prior to the creation of Transport for Edinburgh, Mr Craig served as chief executive of Lothian Buses from 2013 onwards, and has been managing director of the service since 2006.
A spokesman for Transport for Edinburgh said: “No one on the executive management team has been suspended or subject to any disciplinary action.”