THE United Arab Emirates (UAE) on Wednesday (6) extradited a British hedge fund trader accused of massive fraud and money laundering to Denmark to face charges, the official WAM news agency reported.
Sanjay Shah, who was arrested in Dubai in June 2022, is wanted over an alleged £1.44 billion ($1.8 bln) scam to help companies fraudulently claim Danish tax refunds.
“The extradition confirms the UAE’s determination to collaborate with international partners in the pursuit of international justice, and to strengthen the integrity of the international financial system,” WAM said.
In May, a Dubai court ordered Shah to pay Denmark’s tax authority nearly £1.04 bb as well as five-per cent interest accrued from when the case was first lodged in August 2018.
Shah was accused of running a scheme for three years starting in 2012 in which foreign firms pretended to own shares in Danish companies and claimed refunds.
Shah has said he is not guilty and claims he did not violate Danish law, according to media in the UAE.
He was extradited under a treaty signed between the UAE and Denmark in March 2022.
In November, Shah lost a final bid to block Denmark’s tax authority from pursuing him and others after senior judges in London ruled the case could proceed.
The UK Supreme Court unanimously rejected arguments that the case amounted to a foreign state attempting to enforce its domestic tax laws in English courts and breached a well-established principle known as the “revenue rule”.
“The substance of (Danish tax authority SKAT’s) claim is that the appellants defrauded SKAT to obtain refunds to which they were never entitled and SKAT has brought its claims as a victim of fraud,” the judges said.
One lawyer in London said Denmark had shown “dogged persistence” in its case, and that the ruling would “reverberate around the world” amid ongoing litigation over the billions paid out over cum-ex.
“This has to be seen as a significant victory for the Danish tax authorities,” said Aziz Rahman, senior partner at law firm Rahman Ravelli. “It will also give reassurance to other countries that are looking to recoup huge amounts of money that they paid out due to cum-ex.”
A spokesperson for Shah and London lawyers for SKAT declined to comment following the verdict.
The so-called ‘cum-ex’ schemes, which flourished following the 2008 financial crisis, involved trading shares rapidly around a syndicate of banks, investors and hedge funds to exploit the tax systems of countries such as Denmark, Germany and Belgium.
Investigations led by Germany and Denmark have triggered bank raids, arrests and prosecutions. Denmark has charged nine British and US citizens over the schemes.
SKAT alleges Shah’s Solo Capital Partners and others ran a fraudulent scheme that involved submitting wrongful applications for dividend tax refunds on behalf of investors and companies around the world.
The London ruling was announced as Denmark kicked off its first criminal cum-ex trial.
Shah’s Danish trial has been postponed until Jan. 8, 2024. However, his lawyer told a London court in August that he will fight a decision to extradite him to Denmark.
(Agencies)
