Hedge fund founder charged in $1.6B Danish Cum-Ex tax probe

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Sanjay Shah, who founded a London hedge fund that specialized in controversial Cum-Ex trades, was charged by Danish prosecutors in a 9.6 billion-krone ($1.6 billion) tax-fraud probe, according to a person familiar with the case.

Two British citizens, including one who lives in Dubai, were charged, the Danish State Prosecutor for Serious Economic and International Crime said in a statement Thursday. Shah, who lives in Dubai, is one of the two people targeted in the indictment, according to the person, who declined to be identified because the process is confidential.

“This is a case of extremely serious and extraordinarily extensive crime committed against the Danish state,” prosecutors said. “We believe that the two defendants committed cynical and meticulously planned fraud.”

Sanjay Shah in Dubai

The charges are the latest legal escalation for Shah related to trades designed to claim multiple refunds on stock dividends. Shah, who has been described as the “mastermind” of Cum-Ex fraud by the Danish tax authority, also faces a pair of civil lawsuits in the U.K. and Dubai.

A spokesman for Shah said the Solo Capital founder was consulting with lawyers, but reiterated past statements that Shah has never done anything wrong. In an interview last year, Shah said that he took advantage of loopholes in Danish law, but never did anything illegal.

Danish media has widely identified Shah as the primary target of the probe.

The second person charged in the case was described by prosecutors as the “presumed helper” of the principal figure in the case.

The development is a milestone in a scandal that has outraged Danes since they learned that international financiers stole about $2 billion from state coffers by falsely claiming refunds on dividend taxes. The wider Cum-Ex scandal is still being investigated in Germany and the U.K., as well as in Denmark.

The Danes have frozen as much as 3.5 billion Danish kroner of Shah’s assets, including a $20 million London mansion, as part of its civil case. German lawmakers have called the Cum-Ex scandal the greatest tax heist in history.

The Danish Tax Agency said in a separate statement that the latest charges target “some of the central actors” in the Cum-Ex scandal, The agency, which has filed dozens of cases in the U.S., said it’s looking forward to recouping as much of the money as possible.

Bloomberg News
Tax fraud International taxes Tax crimes Hedge funds
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