The south east developer is considering possible provisions to be made against certain asset values in its accounts with its auditors.

This follows a tightening up of its corporate procedures after an independent report by accountant FRP Advisory discovered “significant and repeated failures’ in previous board level corporate governance.

While the amount of such provisions have still to be fully determined, the AIM-listed firm warned the market late on Wednesday that “it appeared likely to trigger a breach of the asset cover covenant applicable to the loan between Inland ZDP and Inland Homes.”

Inland ZDP PLC was formed at the end of 2012 as a funding vehicle to issue zero-dividend preference shares, due to be cashed in April 2024.

The latest warning comes just over a month after veteran house builder Jolyon Harrison was appointed as CEO in a bid to turn the business around.

He joined after Inland delayed publishing its latest results for the year to September 2022 while a series of accountants went through transactions in the books. Losses are expected to hit £91m.

The announcement is set back for Harrison, a former CEO of MJ Gleeson, who joined as Inland agreed a £4m acquisition of West Yorkshire firm NorthCountry Homes, which Harrison held a 51% stake in.

His plan for Inland is to pivot from its traditional market in the South and South East of England and focus on new low-cost home developments in the North.