British trader found guilty of £1bn fraud
A British hedge fund trader has been sentenced to 12 years in prison in Denmark for orchestrating a tax fraud that cost the Danish government over £1 billion. This marks the heaviest penalty ever imposed in Denmark for a fraud case.
In addition to the prison sentence, Sanjay Shah, founder of the London-based hedge fund Solo Capital Partners, received a permanent ban from entering Denmark and will have assets worth $1 billion (DKK 7.2 billion) seized, along with several properties.
Shah immediately appealed the decision, but he will remain in custody. His lawyer, Kaare Pihlmann, told the BBC, “We believe there’s a fair chance the High Court might reach a different conclusion, and we’re hoping for a more lenient judgment.”
Shah entered the courtroom wearing a navy hoodie and a red Santa Claus hat. Seated between his lawyers, the 54-year-old was calm and expressionless as the judge read the verdict.
Prosecutor Nanna Blach told the court that Shah had played a “central and controlling role” in a scheme that led to “unjust” payments, describing the crime as “meticulously planned and organised.”
The sentence followed a high-profile trial lasting several months. Prosecutors accused Shah of masterminding a cum-ex scheme, using complex trades to fraudulently reclaim over £1 billion (DKK 9 billion) in dividend tax refunds from the Danish treasury between 2012 and 2015. Shah denied any wrongdoing, claiming he exploited a legal loophole. His defence lawyers had attempted to have the case dismissed multiple times.
Danish prosecutor Marie Tullin told the BBC that the maximum sentence reflected “the extraordinarily large amount, the duration of the scheme, and Shah’s central role in managing it over several years, defrauding the Danish state.” She added, “It is by far the largest fraud in terms of amount,” noting that the sentence speaks for the unprecedented scale of the crime.
Before his arrest, Shah lived in Dubai, where he was known for hosting lavish parties and concerts for his autism charity, featuring performances by major celebrities.
He was arrested in 2022 and extradited from the United Arab Emirates to Denmark in December last year.
According to Reuters, so-called cum-ex trading schemes have flourished since the 2008 financial crisis, with Germany, Belgium, and Denmark among the European countries most affected.
The schemes typically involve the rapid sale of large volumes of shares from one investor to another immediately before the payment of a dividend, enabling duplicated claims of the withholding tax.
Previously the Danish government has said cum-ex schemes have cost it more than $1.8bn (12.7bn DKK). Shah was one of nine British and US nationals accused of defrauding the state.
Shah also faces a parallel civil tax fraud case in London, filed by the Danish tax authority, that is due to conclude in April.
As he exited the court escorted by police officers, wearing his Santa Claus hat once more, Shah shot a smile towards reporters, and said, “See you next year.”
