Danish authorities have seized British tycoon Sanjay Shah’s £14.7-million Hyde Park mansion in a £1.5 billion fraud case.
Shah, a Dubai-based businessman, was accused of defrauding Denmark of 12 billion kroner (£1.5 billion)—reported to be “the biggest tax fraud” in the country’s history—between 2012 and 2015.
The Danish tax authority, Skat, had filed a civil case at London's High Court following a 2018 European news series (CumEX-Files) on massive tax frauds in which banks, stock brokers and lawyers allegedly swindled billions from German, French and Danish treasuries.
While Denmark's State Prosecutor for Serious Economic and International Crime announced the takeover of Shah’s property, the former hedge fund manager's spokesperson, Jack Irvine, called the move “gesture politics”.
Irvine said the timing of the announcement was “absolutely bizarre”, adding, “We cannot work out what they're playing at. The property was seized well over a year ago by the Danish tax authority.”
The papers filed in London’s High Court had described Shah as “the primary individual said to be responsible for the fraudulent scheme”.
Shah, who was born in London and now lives in Dubai, allegedly used fake documents to claim tax relief on share dividends in Denmark. The Danish tax authority, Skat, had allegedly been tricked into paying multiple refunds to British agents between 2012 and 2015, with about £800 million routed to in Shah's now-defunct hedge fund, Solo Capital Partners.
Shah's lawyers, however, had rejected the allegations and submitted a 204-page defence last year. “Solo Capital Partners provided clearing services for clients to engage in lawful and legitimate trading strategies that were conducted at all times in accordance with Danish law: doing so was neither dishonest nor unlawful,” they argued.
“This case has caused significant embarrassment to Skat and to the Danish government generally, particularly because dividend arbitrage trading is a widely known and wholly legitimate trading strategy.”
The lawyers accused Skat of “attempting retrospectively to amend Danish fiscal law and to cover up or remedy Skat's earlier failure to limit such trading activity and thereby attack the defendants, who have done nothing dishonest nor illegitimate”.
Incidentally, the UK's National Crime Agency (NCA) had raided Solo Capital’s offices in 2016, and its global assets were frozen.
“The NCA conducted an initial investigation into an alleged fraud to the value of over £1 billion committed against the Danish and Belgian tax authorities between 2012 and 2015,” said the NCA's director of investigations, Nikki Holland.
“It was agreed, with the support of the Crown Prosecution Service, that investigative challenges would prevent the NCA being able to present evidence which would have a realistic possibility of leading to a prosecution in the UK,” she added. “This case was transferred to the Danish authorities in October 2019, and we continue to provide support as required.”
Shah’s spokesperson said the tycoon would not be returning to the UK for case proceedings, but he “continues to protest his innocence and repeats that he received two separate legal opinions that the cum-ex trades were legal.”
Irvine also remarked that it seemed “odd that Soik [state prosecutors] now make another announcement”, as Skat had already seized Shah’s property a year ago.
He said it was a case where the “left hand doesn’t know what the right hand is doing”.
A statement from Demark’s State Prosecutor for Serious Economic and International Crime, however, said it was only now that a Danish court approved “confiscation”.
“Now, the English authorities have finally confirmed that the seizure has been accomplished, and the assets has been secured in London,” the statement added.
