British hedge fund manager accused of huge tax fraud is ordered to pay £1.1 BILLION to Danish authorities by Dubai court
- Sanjay Shah, 52, was expected to be extradited from Dubai to court in Denmark
- He is accused of committing enormous tax fraud in the Scandinavian country
- A Dubai court on Monday ruled that Shah would not be extradited to Denmark
- But a judge ruled that the hedge fund manager must pay a whopping £1.1bn to Copenhagen’s tax authority
A British man accused by Denmark of masterminding a massive tax fraud has been ordered by a Dubai court to pay Copenhagen’s tax authority 1.25 billion dollars (£1.1bn), court filings show.
The order by the Dubai Court of Appeal against Sanjay Shah comes as part of a civil case filed four years ago by Denmark’s tax authority, which has been pursuing him as part of their investigation into one of the country’s largest tax fraud cases.
The elaborate scheme, which ran for three years from 2012, involved foreign businesses pretending to own shares in Danish companies and claiming tax refunds they were not eligible for.
The 52-year-old hedge fund manager has maintained his innocence in past interviews with journalists but never appeared in Denmark to answer accusations.
An Emirati court on Monday ruled that Shah would not have to face extradition to the Scandinavian country, but Danish prosecutors have filed an appeal to overturn that decision, according to Shah’s lawyers.
Monday’s court ruling for Sanjay Shah, 52, can be appealed by prosecutors
The Danish tax authority, Skattestyrelsen, filed its civil case against Shah in 2018 through a local Dubai law firm.
In its decision on Wednesday, the Dubai Court of Appeal said Denmark had sought 1.9 billion dollars (£1.67bn) from Shah and his alleged accomplices.
Dubai police arrested Shah in June after the UAE and Denmark signed an extradition treaty, but the financier’s lawyer Ali al-Zarooni argued in past closed-door hearings that Denmark had ‘breached’ the rules of international extradition treaties in unspecified ways.
The Dubai court’s decision on Monday not to extradite Shah would likely have come as a surprise to prosecutors, but it appears the hedge fund manager will still be forced to pay an incredible fine.
‘Of course we will try to get [Shah] out on bail now immediately,’ al-Zarooni, told the Associated Press on Monday.
Shah’s lifestyle on Dubai’s luxurious palm-shaped island over the past few years has sparked outrage in Denmark.
During his time in Dubai, the hedge fund manager ran a centre for autistic children that shut down in 2020 as Denmark tried to extradite him.
He also oversaw a British-based charity, Autism Rocks, which raised funds through concerts and performances.
Dubai police Brigadier General Jamal Al Jallaf said Shah was accused of a fraud that allegedly saw foreign businesses pretend to own shares in Danish companies and claim tax refunds for which they were not eligible.
‘The fraud scheme, known as ”cum-ex” trading, involved submitting thousands of applications to the Danish Treasury on behalf of investors and companies from several countries around the world in order to receive dividend tax refunds,’ Brig Gen Al Jallaf said.
Shah’s lifestyle on Dubai’s luxurious palm-shaped island over the past few years has sparked outrage in Denmark
In a joint statement, Denmark’s justice and foreign ministries in June praised Dubai’s arrest of Shah, whom they described as a target of the country’s prosecutors since 2015.
The trader previously had had his £14.7million Hyde Park mansion seized by Denmark after being accused of the fraud.
A spokesman for Shah at the time called Denmark’s move ‘gesture politics’.
Shah’s arrest comes as pressure grows on Dubai, the region’s financial hub, over its alleged weaknesses in combating illicit finance.
The UAE, a federation of seven emirates, has long invited the wealthy, including disgraced public figures, to invest in the country without questioning where they made their money.
In recent months, however, the UAE has arrested several suspects wanted for major crimes, including two of the Gupta brothers from South Africa, accused of facilitating vast public corruption and draining state resources with former president Jacob Zuma.
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