Former head of KiwiBuild Stephen Barclay quit his role while being investigated over complaints from staff about his behaviour.
The Ministry of Housing and Urban Development (MHUD) issued a statement this afternoon, revealing the context behind Mr Barclay's sudden absence from work late last year and his resignation this month.
MHUD chief executive Andrew Crisp said he had received complaints from "employees, contractors, and stakeholders" about Mr Barclay's "leadership behaviour" and treatment of others.
The Ministry launched an employment investigation into the complaints, but Mr Barclay quit before it was complete, Mr Crisp said.
"Mr Barclay resigned with immediate effect and received no payment in lieu of notice," Mr Crisp said. Mr Barclay did not receive any exit payment or confidential deal.
But in a statement from a PR agency, Mr Barclay said he was "extremely disappointed" the Ministry had breached his privacy. He said he was pursuing a "case of constructive dismissal".
Mr Barclay said no issues were raised about his performance before the KiwiBuild programme was transferred to MHUD from the Ministry of Business, Innovation and Employment.
"Within two weeks of the KiwiBuild programme moving to MHUD, [Mr Barclay] can confirm there were a small number of complaints from individuals who held a close relationship to the CEO, Mr Crisp," the statement said.
"The nature of the complaints related to Mr Barclay's direct management style and dealings with certain individuals."
Mr Crisp said the complaints were not related to KiwiBuild's implementation, but Mr Barclay rejected that, saying they were "entirely linked".
"[Mr Barclay's] commitment was to execute against the targets of the KiwiBuild programme, and he was attempting to do this at pace," the statement said.
"As soon as [Mr Barclay] was informed of the complaints, he responded to them within the week, requesting the complaints be independently investigated and additional people relevant to the complaints be questioned."
Mr Barclay said, instead, he was suspended from his role for more than two months, making his position untenable and leading him to resign.
He said KiwiBuild was on track to meet its year one target at the point at which he was suspended.
In a statement, State Services Commissioner Peter Hughes sided with MHUD, saying he was "satisfied" with the way Mr Crisp had managed the employment matter.
"His actions are consistent with what I would expect of a public service chief executive.
"I am acquainted with the facts of this case and they do not support a number of statements in the media release issued by Mr Barclay's public relations company today."
The KiwiBuild programme has attracted strong criticism in recent weeks, following Mr Twyford's concession the government would fall drastically short of its first-year house-building target.
Mr Twyford turned down an interview request, saying it would be "inappropriate" to comment on an employment matter regarding a public servant.
The National Party has called for Mr Twyford to lose his portfolio.
Since mid-November, the KiwiBuild team has been run by a member of MHUD's leadership team, Brad Ward.
The government has also announced a new Housing and Urban Development Authority (HUDA) to bring together the government's housing supply programmes, including KiwiBuild and Housing New Zealand.