CEO placed on leave following board failures

The Homes and Communities Agency (HCA) today criticised Saffron Housing Trust for keeping quiet about the failings since 2011, having only informed the regulator in June 2016.

Adam Ronaldson has been placed on paid leave while an internal investigation takes place, with John Whitelock, director of new business, taking over as interim. Saffron would not confirm whether Mr Ronaldson is likely to return to his post.

In a regulatory judgement today, the HCA downgraded the 5,000-home landlord’s governance rating to a non-compliant G3, which reflected “the scale, impact and duration of Saffron’s historic failures”.

The judgement said Saffron had informed the regulator that problems in the governance process and failures to comply with its rules meant some board members had not been appointed properly. This continued over a period “of several years”.

“Significant decisions were made during this period involving third parties and funders and there was uncertainty about the validity of all the decisions that had been made at those meetings given some board meetings had been inquorate,” the regulator added.

“It is understood that Saffron became aware of this issue in 2011 – it appears to have been known at the highest levels within the organisation – yet the matter was not properly and appropriately rectified, nor was it raised with the regulator.”

It said Saffron’s “failure to work openly with the regulator” represented a “fundamental breakdown in trust”.

Saffron’s board is now properly constituted and has ratified all of the decisions made previously by the illegitimate board.

A Saffron spokesperson said: “As an organisation, we are determined to ensure that the historic failings that have come to light are not repeated and that we have correct and robust governance to ensure a stable, compliant and successful future.”

Moody’s had confirmed its credit rating has not changed in light of the discoveries. Saffron said its financial position was unaffected by the error.

Meanwhile, St Vincent’s Housing Association and Tower Hamlets Community Housing (THCH) were each issued with regulatory notices because of breaches over their fire safety procedures.

A spokesperson for St Vincent’s said “bringing these works up to date has been the number one priority for the organisation”. A THCH spokesperson said it had “immediately put in place a recovery plan around fire assessment”.

Colne Housing Society was downgraded to a compliant G2 after failing to submit accurate financial information to its board and the regulator. A spokesperson said an improvement plan was in place to address the HCA’s findings. Aldwyck Housing Group was reissued with a compliant G2 and V2 governance and viability grading following an in-depth assessment with the regulator.

Full list of judgements – narrative and strapline – issued by the HCA today