In the latest round of allegations from Voce Capital against Argo Group over company expenses, the activist investor has taken aim at the Bermuda re/insurer's corporate-owned properties and the supposed mis-use of corporate aircraft by CEO Mark Watson III.
Argo has again been quick to rebut these accusations, claiming Voce "continues to make false and misleading statements" about the company.
This time, Voce claims to have uncovered "questionable" allocations of capital relating to corporate-owned apartments, along with flight logs with “questionable destinations”.
The investor questioned Argo's explanations for its so-called corporate housing programme, particularly in New York and Bermuda.
“Argo’s indignation is somewhat puzzling. Argo appears to be quibbling over the location of Argo’s corporate loft for Mr Watson rather than its existence," said Voce.
Voce added: “We took exception to Argo’s provision of Bermuda housing to Mr. Watson in light of the $2.9 million relocation bonus it had previously paid him, ostensibly to move to Bermuda. Subsequently, the company announced the termination of the housing stipend, but notably did not acknowledge or address the long-term lease that we believe Argo undertook for Mr. Watson’s benefit at ‘The Jungle’ a luxurious villa along billionaire’s row that has served as his private home when he’s in Bermuda.”
Argo was quick to dismiss Voce's claims, and said: "Like so much of Voce’s poorly researched narrative, this latest representation is simply wrong."
The Bermuda re/insurer suggested the properties identified in Voce’s press release are not corporate housing, but rather part of its investment property portfolio.
"They are income-producing assets purchased in connection with a Section 1031 like-kind real estate exchange following the sale of a commercial property in California," Argo explained.
Furthermore, Voce claims to have identified three Argo corporate jets in its “aircraft programme” and detailed their extensive use in a flight log, which it suggested includes a number of "highly questionable" dates and destinations, with locales that have no Argo offices.
Voce stated: "We reiterate our fundamental point that the employees of a small company like Argo, whose offices are in global financial hubs, should utilise the abundant commercial flights available when traveling. The multi-million dollar annual expense for a company of Argo's size to carry such aircraft is completely unjustified."
Argo again suggested these claims are inaccurate, and that the flight log Voce refers to was "neither owned by Argo, nor exclusively used by Argo."
It added: "Lastly, when our executives use corporate aircraft for personal trips, they do so at their own expense."