Hedge fund founder Sanjay Shah has been accused of masterminding a “meticulously pre-planned” cum-ex trading scheme that defrauded the Danish government of £1.4bn ($1.7bn) at a civil court case in London brought by Danish tax agency Skat.
Dozens of traders are being sued by Skat as it looks to recoup the losses incurred from the controversial tax trading strategy. Shah, who founded hedge fund Solo Capital Partners, is currently being tried in a criminal court in Denmark over the scheme and faces a lengthy prison term if convicted.
The cum-ex scheme was a tax-driven trading strategy which saw a global network of bankers, lawyers and agents exploit loopholes on dividend payout laws across Europe to profit from duplicate tax refunds. Roughly 1,800 people are still under investigation in Germany and a total of nine have been charged in Denmark.
According to documents prepared for the year-long trial by Skat’s lawyers, Shah, who maintains his innocence, masterminded the scheme and made fraudulent misrepresentations through his firm as part of its applications for a “refund” of dividend tax between 2012-2015.
