In a landmark ruling, British hedge fund trader Sanjay Shah was handed a 12-year prison sentence in Denmark for masterminding a tax fraud scheme that defrauded the Danish government of over £1 billion. This marks the heaviest penalty ever imposed for a fraud case in Denmark’s history.
Shah, founder of the London-based Solo Capital Partners hedge fund, was found guilty of orchestrating a cum-ex scheme—a sophisticated trading strategy that enabled fraudulent claims of dividend tax refunds from the Danish treasury between 2012 and 2015. Prosecutors accused him of meticulously planning and controlling the scheme over several years.
In addition to the prison term, Shah was permanently banned from entering Denmark. Authorities also seized assets worth $1 billion, including properties linked to his activities. Shah has appealed the verdict but will remain in custody during the process.
Shah's defense maintained that the trades exploited a legal loophole, attempting unsuccessfully to have the case dismissed. "We are hopeful the High Court will take a different view," said Shah’s lawyer, Kaare Pihlmann.
The cum-ex scheme, which involved rapid trading of shares around dividend payment dates to generate duplicated tax refund claims, is estimated to have cost Denmark over $1.8 billion in total. Similar schemes have impacted other European countries, including Germany and Belgium.
Shah was one of nine individuals from the UK and the US accused of defrauding Denmark. His arrest in Dubai in 2022 and subsequent extradition to Denmark in December 2023 marked the culmination of years of international legal pursuit.
Before his arrest, Shah was known for leading an opulent lifestyle in Dubai, hosting extravagant parties and high-profile charity concerts. However, his legal troubles are far from over, as he faces a parallel civil tax fraud case in London, scheduled to conclude in April.
