The commission opened a statutory inquiry into the charity, which supports forces personnel and their families, in November to look at various concerns, in particular possible unmanaged conflicts of interest, unauthorised trustee benefits, financial mismanagement and serious governance failures.
The charity had an income of £548,440 in 2012, but spent only £15,200 on charitable activities, its accounts show.
Brian Johnson, a partner at the accountancy firm HW Fisher & Company, was appointed this week as interim manager to the exclusion of the charity’s two trustees, meaning he has taken overall control of its activities. The trustees were informed by the commission of its move at a pre-arranged meeting yesterday.
Johnson will review the current activities and governance of the charity and take steps to protect its interests and assets, the commission said.
The charity and its trading subsidiaries were already unable to make payments from its bank accounts or dispose of property without the regulator’s consent, after the commission decided to use its legal powers shortly after opening the inquiry.
Third Sector revealed in December that Liam Fox, the Conservative MP for North Somerset and former defence secretary, had stepped down as a patron of Afghan Heroes because the charity did not tell him that it was the subject of a commission inquiry.
A highly critical Public Accounts Committee report on the Charity Commission, published this week, referred to the investigations into Afghan Heroes as evidence that "the commission's internal processes and investigations are slow and inefficient".
In its response to the PAC report, the commission said it did not accept that its actions in the Afghan Heroes case constituted an example of slow progress and set out what it had done with the case since September.
Afghan Heroes said it had no comment to make.