Cornwall based Kerrier Homes Trust has suspended its chief executive Stuart Dry.
The trust, which has been under Housing Corporation supervision with appointees imposed on the board since January, said it took action "with immediate effect".

It refused to give further details but said company secretary Ian Birchmore had been appointed acting chief executive.

The trust took over Kerrier council's housing stock only four years ago. Dry was brought in after the death of first chief executive Neil Dutton following an accident.

The corporation raised serious concerns over governance and operations at the trust, which has 3,600 homes. It froze all new grants to Kerrier until the problems are resolved.

Last autumn it discovered it was heading for a significant overspend on maintenance. It took corrective action and says the situation was "wholly in order" by April.

Birchmore confirmed that a new regulation committee is working through an action plan to address the corporation's concerns. It meets monthly and has dealt with most of the demands. "The rest are issues that take longer but they are being addressed. We can definitely see light at the end of the tunnel," he said.

Plans to form an alliance with Devon and Cornwall Housing Association are on ice until at least next March, however. Recent improvements suggest the board could decide to stay independent.

Birchmore added: "Rent restructuring brings us significant challenges, like others in the region, but we are working through them. There is a strong, confident future for Kerrier and we are determined to get on top of the issues."