Sanjay Shah Denies Involvement in “Cum-Ex” Scheme that Defrauded Danish Treasury
The trial of British hedge fund manager Sanjay Shah began on Monday in Copenhagen, where he is accused of masterminding a tax fraud scheme that cost the Danish state $1.8 billion. Shah, the primary suspect in the notorious “cum-ex” case, denies all charges, with prosecutors alleging he manipulated dividend tax refunds through complex trading strategies in the aftermath of the 2008 financial crisis.
During the opening session, prosecutor Marie Tullin requested that Shah’s assets, valued at 7.2 billion Danish crowns, including various UK-based properties, be seized by the Danish state. Shah, dressed in casual attire, did not testify on the first day, as the prosecution outlined the 300,000 legal documents related to the case.
The charges Shah faces under Danish law could result in a prison sentence of up to 12 years if convicted. His defence attorney, Kaare Pihlmann, expressed concerns about the fairness of the trial, citing previous comments from Denmark’s justice minister that seemed to suggest Shah’s guilt. The judge, however, rejected the request to dismiss the case.
Shah, the founder of London-based Solo Capital Partners, was arrested in Dubai in 2022 and extradited to Denmark in December, where he remains in custody. The Danish authorities have charged nine individuals, including British and US citizens, with involvement in the “cum-ex” trading schemes, which reportedly defrauded Denmark of 12.7 billion crowns ($1.85 billion) between 2012 and 2015.
The “cum-ex” schemes revolved around complex share trades conducted by a network of banks, investors, and hedge funds just before dividend payouts. This allowed traders to illegally reclaim taxes multiple times on the same dividends. Shah’s media advisor, Jack Irvine, has maintained that Shah is innocent, claiming the issue stemmed from misunderstandings within the Danish tax system.
As part of the criminal proceedings, the Danish state is also pursuing a separate civil case to recover the funds lost in the fraud, though it remains uncertain how much money will be retrieved. Legal costs for these proceedings are expected to reach 4.3 billion crowns by 2029.
The case will serve as both a legal pursuit and a warning against financial crimes, with 50 court hearings scheduled until June 2025. Shah’s associate, Anthony Mark Patterson, who confessed to his role in the fraud and was sentenced to eight years in prison, is expected to testify against Shah in the upcoming hearings.
