British hedge fund manager Sanjay Shah has been sentenced to 12 years in prison in Denmark for his role in a £1 billion tax fraud scheme, marking one of the longest sentences for tax fraud in Danish history.
The 54-year-old Shah was at the center of a trading scheme known as “cum-ex,” which fraudulently acquired 9 billion Danish Krone (approximately £1 billion) in dividend tax refunds from the Danish treasury between 2012 and 2015. Appearing in court while wearing a red Christmas hat, Shah denied any wrongdoing, asserting that he merely exploited a legal loophole and has filed an immediate appeal against the guilty verdict to the Danish High Court.
Prosecutors aimed for the maximum sentence of 12 years in light of the severity of the fraud, emphasizing the impact of Shah’s actions.
Shah was apprehended in Dubai in 2022 and extradited to Denmark the following year to face trial. Prosecutors revealed that investors, guided by Shah’s London-based hedge fund, Solo Capital Partners, engaged in rapid share trading around the time of dividend payouts. This created the false impression of multiple owners, each eligible for tax refunds despite not effectively owning the shares or having contributed to dividend tax in Denmark.
During the trial, Shah described his trading methods as a way for participants to claim ownership of shares for tax refunds. In a candid interview with Danish broadcaster TV2 before the verdict, he referred to himself as a “greedy bastard” and likened his trading strategies to “playing Space Invaders,” focusing on surpassing his previous high scores.
Apart from his criminal prosecution, Shah is also confronting a separate civil tax fraud case in London’s High Court, initiated by the Danish tax authority, with a resolution expected in April.
In a video-link court appearance, Shah previously claimed that a legal “defect” enabled his successful trading tactics, allowing him to indulge in extravagant purchases, including a Ferrari, and to award himself a £19 million bonus for his 40th birthday.
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