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Mr Kennett was unhappy with Bay’s disciplinary record but he disagreed with fellow directors as to how to tackle the problem.
He stepped down as chairman initially and left the board completely, leaving Bill Dordoy to continue as chairman until the end of the season.
Denly confirmed: “There was a disciplinary problem. A disciplinary issue was brought to my attention and it was dealt with how it was dealt with in the end.
“Trevor wasn’t happy with a few areas of that and, as a result, he’s ended up resigning over it. I’m not going to go into detail about what actually happened but I’m disappointed Trevor’s gone.
“He was a great chairman and it was a pleasure working with him. Trevor brought me to the club, so I’ve got a lot of respect for him and I’m gutted to see him go.
“What’s happened has happened, so we’re not going to get involved in that as players or me as the manager. I’ve got to make sure we’re concentrating on things that happen on the football pitch. Of course it’s disappointing to see Trevor go but I’m sure things will work out.”
Denly, appointed as Simon Halsey’s successor last May, added: “A manager’s only as good as his chairman. If he feels I’m not doing the job, there’s the door. By the same token, if a new chairman comes in, he may have other ideas, you just don’t know.
“I had a good relationship with Trevor. I’m honest in what I do, I think people know that, so hopefully I can work with the new chairman and we can look to push Herne Bay Football Club forward.”
Denly has given his players Thursday night off ahead of their home game against Chipstead in Ryman League, Division 1 South on Saturday. Joe Nelder is suspended but fellow midfielder Sam Hasler should be fit.
Bay entertain Three Bridges on Tuesday.
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