Cum-ex tax fraud suspect Shah detained in Denmark before trial
Reuters
December 7, 202310:43 PM GMT+8 Updated 12 hours ago
[1/3]Sanjay Shah, who is charged in a dividend tax fraud case and who has been extradited to Denmark from the United Arab Emirates, appears in a constitutional hearing at a court in Glostrup, Denmark, December 7, 2023, in this courtroom sketch.
[2/3]Court drawing of Sanjay Shah in a constitutional hearing at the Court, in Glostrup, Denmark, December 7, 2023. Sanjay Shah, accused of participating in fraudulent share trading schemes, has been extradited to Denmark from Dubai.
[3/3]Sanjay Shah, who is charged in a dividend tax fraud case and who has been extradited to Denmark from the United Arab Emirates, appears in a constitutional hearing at a court in Glostrup, Denmark, December 7, 2023, in this courtroom sketch.
COPENHAGEN, Dec 7 (Reuters) – British hedge fund trader Sanjay Shah will be held in detention in Denmark for at least four weeks following his extradition from the United Arab Emirates, a Danish court ruled on Thursday according to public broadcaster DR.
Shah is due to face trial in Denmark early next year on charges related to so-called “cum-ex” trading schemes in which the Danish state says it lost more than 12.7 billion crowns ($1.84 billion). He denies any wrongdoing.
The court case, postponed three times awaiting his extradition, is scheduled to begin on Jan. 8.
However Shah’s lawyer in Denmark, Kare Pihlmann, told reporters outside the court the defence needed more time to prepare its case and he expected it would be postponed again.
Shah, who is the main suspect in the case, was arrested by Dubai police last year following a request by Danish authorities to extradite him. He arrived in Denmark on Wednesday.
Denmark has charged nine British and U.S. citizens over the schemes.
($1 = 6.9208 Danish crowns)
Hedge Fund Trader, Accused of Fraud, Is Extradited to Denmark
Sanjay Shah had been pursued by Danish authorities, who said he was behind a scheme to steal $1.3 billion from the national coffers.
Sanjay Shah, the British hedge fund trader, arriving Wednesday at Kastrup airport in Copenhagen after his extradition from the United Arab Emirates.Credit…EPA, via Shutterstock
Dec. 6, 2023
A British hedge-fund trader accused of defrauding Danish taxpayers of $1.3 billion has been extradited to Denmark by the United Arab Emirates, where he had lived for more than a decade.
The trader, Sanjay Shah, was taken into police custody on Wednesday morning after his arrival in Copenhagen and is expected to appear in court on Thursday for a bail hearing.
Danish authorities have been pursuing Mr. Shah since learning that starting in 2012, they said, he and colleagues at Solo Capital in London had found a way to siphon money from the country’s version of the Internal Revenue Service. The method involved a complicated, carefully choreographed trade of tax refunds on stock dividends. Mr. Shah has long maintained his innocence.
These so-called cum-ex trades had been used by other traders to drain fortunes from other countries in what one academic called “the biggest tax theft in the history of Europe.” The toll has become clear in a continuing reckoning of arrests and trials on the continent. Germany was taken for about $30 billion, France lost about $17 billion, and smaller sums were lifted from Poland, Norway, Austria, Italy and others.
These countries did little to warn others about cum-ex trades. Denmark was one of the last countries hit, and it has spent years trying to cajole and negotiate with the U.A.E. for Mr. Shah’s extradition.
“The dividend case is an important one for Denmark, and it is one of the largest and most serious criminal fraud cases,” said Peter Hummelgaard, the country’s minister of justice. “It is our public money, our welfare state and our trust-based society that are at stake.”
Mr. Shah has said he merely took advantage of a loophole, one that lawyers advised him was completely legitimate. His publicist, Jack Irvine, said that, without admitting guilt, Mr. Shah had made an offer to settle the matter years ago, but it was dismissed out of hand.
“Mr. Shah appears to have been found guilty by the Danish government, legal authorities and media in advance of a trial,” Mr. Irvine wrote in a statement. “We need to ask, can he possibly receive a fair trial?”
Mr. Shah moved to Dubai in 2009, saying he fell in love with the city. He lived for a time in a 10,000-square-foot villa with access to the beach and a $1.3 million yacht.
As Danish prosecutors painted him as a national villain, authorities in Britain, the U.A.E. and Germany started freezing his assets, and Mr. Shah was eventually forced to put his house on the market, Mr. Irvine said. For years, he did not travel out of fear that he would be arrested.
Under pressure from Danish investigators, Mr. Shah was arrested in the U.A.E. in May 2022. It took months for the countries to sign an extradition agreement so that Mr. Shah could be sent to Denmark to stand trial.
The case will be one of many in the ongoing cum-ex aftermath. Danish authorities have filed a lawsuit in London targeting dozens of financial institutions, seeking to reclaim some $1.7 billion in lost tax revenue.
And in Germany, more than 1,000 lawyers and financiers are under investigation and several have already been convicted and fined for similar offenses. In May, a former tax investigator, Hanno Berger, the putative mastermind of cum-ex trades in Germany, was sentenced to eight years in prison. He had been extradited from Sweden, where he had lived since 2012.
UAE extradites British trader Sanjay Shah to Denmark
Published
1 day ago
BBC News
British trader Sanjay Shah has landed in Denmark after being extradited from the United Arab Emirates (UAE) over tax fraud charges worth £1.46bn.
Mr Shah, who lives in Dubai, is accused of participating in fraudulent share trading schemes.
He was arrested by Dubai police last year following the Danish investigation into Solo Capital, a hedge fund that he founded.
Mr Shah denies the charges and insists that the trades were legal.
Denmark is one of the countries hardest hit by so-called “cum-ex” schemes, although they also flourished in Germany and Belgium. The scam involved rapidly selling shares between investors in order to create confusion over who owned the shares at the time a dividend was paid out.
Tax on the dividends was subsequently reclaimed by multiple parties, although it was only paid once.
The tax fraud merry-go-round that cost billions
Denmark says Mr Shah’s Solo Capital ran fraudulent schemes for companies and investors between 2012 and 2015. Mr Shah is the primary suspect in the Danish case of tax fraud.
The money Danish authorities are seeking to recoup amounts to some 12.7bn crowns (£1.46bn; $1.84bn; €1.7bn) – nearly 0.5% of the country’s entire GDP.
“This is one of our biggest and most serious cases of financial fraud,” Justice Minister Petter Hummelgaard said.
Prosecutors will ask for Mr Shah to be held in custody until the start of his trial, scheduled for January next year.
After Mr Shah lost his job as a trader during the 2008 financial crisis, he founded Solo Capital and moved to the UAE. In Dubai, he led an extravagant lifestyle, including living on the exclusive Palm Jumeirah island. Musicians who played for an autism charity he founded included Elton John and Drake.
He bought two yachts, naming them the Solo and Solo II.
But since 2020, he has been doggedly pursued by Danish authorities over the fraud charges. Much of Mr Shah’s fortune, including a £15m central London property, has been frozen.
Last month, in a separate case, Mr Shah lost a bid in the UK Supreme Court to block Denmark from pursuing him in English courts.
Also in November, British national Guenther Klar, who worked for Solo Capital between 2010 and 2012, went on trial in Denmark in the country’s first court case over cum-ex fraud.
Mr Klar, who was extradited from Belgium, is accused of defrauding the government of some 320m Danish crowns (£37m). He denies wrongdoing.
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