UK trader heads to trial on charges of defrauding Danish state in 'cum-ex' case

Sanjay Shah, the main suspect in the so-called cum-ex case, denies any wrongdoing, while prosecutors say he has fraudulently obtained a refund of dividend tax from the Danish treasury.

"He is innocent," Shah's media and political adviser, Jack Irvine told Reuters on Friday. "The Danes themselves didn't understand their own tax law, that's the problem," he added. Shah's lawyer was not immediately available for comment.

The criminal proceedings, which start on Monday, will primarily act as a deterrent, while the state in a separate civil case, which is set to begin later, aims to recoup the money it says it has lost in the cum-ex case.

"There is a deterrent element if authorities can show that they're not just interested in getting the money back in situations like this, but they're interested in putting people behind bars," said Neil Swift, a lawyer specialising in business crime at Peters & Peters.

Denmark has charged nine British and U.S. citizens over the so-called 'cum-ex' schemes, which it says cost it more than 12.7 billion crowns ($1.85 billion) between 2012 and 2015.

Shah, founder of London-based hedge fund Solo Capital Partners, was arrested in Dubai in 2022 and extradited to Denmark in December where he is still being held in custody.

The 'cum-ex' schemes, which flourished following the 2008 financial crisis, involved trading shares around a syndicate of banks, investors and hedge funds immediately before the dividend payout date, allowing traders to reclaim double the taxes.

Denmark, Germany and Belgium were particularly hard hit, and the practice is considered illegal in most countries.

The Danish state's legal advisor has said it is not possible to assess how much it will be able to retrieve, and has estimated that the costs for legal proceedings between 2017 and 2029 could amount to 4.3 billion crowns.

The Danish tax authority has filed civil lawsuits against roughly 500 companies and individuals in the U.S., Britain, Dubai, Malaysia, Canada and Denmark, in addition to pressing criminal charges.

A crackdown has triggered bank raids, criminal proceedings and litigation.

Anthony Mark Patterson, who is seen as Shah's closest accomplice, was in February sentenced to eight years in prison by a Danish court in the country's first criminal cum-ex trial.

Patterson, who confessed to helping defraud tax authorities of around 8.4 billion Danish crowns, has been called as a witness in the Shah case, prosecutors have said.

More than 50 court hearings are scheduled for Shah's case between Monday and June 2025.