Danish authority to pay £46 million over failed suit against Briton Sanjay Shah
LONDON’S high court has directed the Danish tax authority to pay a £46 million legal bill following its failed attempt to sue a British tycoon accused of a £1.5 billion fraud, the Times reported.
British businessman Sanjay Shah, 51, is a virtual prisoner in his Dubai mansion after the Danish authorities obtained a worldwide freezing order against more than £500m of his assets.
However, Shah insisted that he is the victim of politically motivated allegations by the Danish government that his London-based trading firm fraudulently claimed tax reductions through a scheme called “Cum-Ex”.
Shah’s company, Solo Capital Partners LLP, used an ambiguous tax loophole that allowed trading in shares with dividend payments, the newspaper said.
The trades exploited an interpretation of Danish tax laws that seemed to allow multiple investors to claim refunds on a dividend that was paid only once.
The Danish tax department claimed there is no evidence that real shares were used in the divided refunds claimed by Solo Capital and its clients.
Shah said the trades were legitimate.
In April, the Danish Customs and Tax Authority case against 100 defendants including Shah was dismissed by Justice Andrew Baker at the high court in London.
He revealed that the Danish authority was not entitled to enforce its own tax laws in an English court and ordered them to pay all defendants’ legal bills.
Baker said the case was “aggressively pursued, by a sovereign state with a willingness to expend effectively unlimited resources” and was “politically as well as financially motivated”.
The judge described the litigation as “the subject of ill-judged public statements by senior Danish politicians appearing to pre-judge the factual issues that would have fallen to be determined by the court”.
According to the Danish media, the tax authority has been ordered to pay by this week £46m of the £72m owed to lawyers, including more than £8m to Shah’s legal team.