A British hedge fund trader has been sentenced to 12 years in prison in Denmark, after being found guilty of masterminding a tax fraud that cost the Danish government more than £1 billion.
This is the heaviest sanction ever imposed in Denmark for a fraud case.
In addition to the prison sentence, financier Sanjay Shah, founder of London-based hedge fund Solo Capital Partners, was given a permanent entry ban into Denmark and will see assets worth $1 billion ( 7.2 billion Danish crowns) seized, as well as a chain of properties.
He announced his intention to appeal the verdict.
“We think there is a good chance that the High Court will come to a different conclusion, and obviously we also hope for a more lenient judgment,” his lawyer, Kaare Pihlmann, told the BBC.
Shah entered the courtroom wearing a navy blue hooded sweatshirt and a red Santa hat.
Sitting between his lawyers, the 54-year-old Briton was calm and impassive as the judge read the verdict.
Nanna Blach told the court that Shah played a “totally central and controlling role” in a scheme that led to “unfair” payments, adding that the crime had been “meticulously planned and organized”.
This conviction comes at the end of a highly publicized trial which lasted several months.
Prosecutors had accused Shah of being the mastermind of a so-called cum-ex scheme, using a series of complex transactions to fraudulently recover more than £1 billion (9 billion Danish crowns) in tax refunds on dividends to the Danish Treasury between 2012 and 2015.
Shah had repeatedly denied any wrongdoing, arguing that he had used a legal loophole. His lawyers have tried several times to have the case dismissed.
Danish prosecutor Marie Tullin told the BBC that Shah's maximum sentence reflected “the extraordinarily high amount, the time spent and his role in managing all of this, over several years committing this fraud against the Danish state.” .
“This is by far the largest (fraud) in terms of amount,” she added. “I also think that the sentence speaks for itself, in that this is a crime that has never been seen on this scale before.”
Before his arrest, Shah lived in Dubai, where he was known for throwing lavish parties and had organized 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 systems have flourished since the 2008 financial crisis, with Germany, Belgium and Denmark among the worst-hit European countries.
These schemes typically involve the rapid sale of large volumes of shares from one investor to another immediately before a dividend is paid, thereby allowing for repeated withholding tax claims.
The Danish government previously said the cum-ex projects had cost it more than $1.8 billion (DKK 12.7 billion). Shah was one of nine British and American nationals charged with defrauding the state.
Shah also faces a parallel civil tax fraud case in London, filed by the Danish Tax Office, which is expected to conclude in April.
As he left the court escorted by police, again wearing his Santa hat, Shah flashed a smile to reporters and said, “See you next year.”
