Sanjay Shah, the British hedge fund trader accused of masterminding an allegedly fraudulent cum-ex trading scheme has told a Danish court that there was nothing illegal in his receipt of more than DKK9bn ($1.3bn) in dividend tax refunds from the country’s authorities.
The report quotes the Founder of hedge fund firm Solo Capital during cross-examination in the first week of his trial, where he testified that “there was no wrongdoing or fraud at Solo” and that the hedge fund “was always in compliance with rules and laws”.
Danish prosectors allege that Shah was the key player in a scam that, between 2012 and 2015, earned huge sums from fraudulent dividend tax refunds through the rapid trading of shares by a large group of investors, brokers, short-sellers and others that could be used to claim multiple refunds of taxes withheld from dividends.
According to Shah, though, whose firm reclaimed applications sent on behalf of hundreds of American and Malaysian pension funds, there was a “flaw in the system” that allowed those transactions to take place.
Two traders have already been convicted in Denmark in relation to the cum-ex scandal, while another seven, including Shah, have been charged. Earlier this month, fellow British trader Anthony Patterson was handed an eight-year prison sentence after pleading guilty to helping Shah in running the scheme.
