In Copenhagen, a British hedge fund trader finds himself at the center of a high-stakes trial, facing allegations of defrauding Danish tax authorities in a billion-dollar scheme.
His court appearance comes hot on the heels of his partner’s recent sentencing to eight years in prison.
Sanjay Shah, apprehended in June 2022 in his Dubai residence, faces allegations of orchestrating a nine-billion-kroner ($1.32 billion) scam. The scheme allegedly allowed his affiliated companies to deceitfully obtain Danish tax refunds during the period spanning from 2012 to 2015.
At 53 years of age, Shah adamantly proclaims his innocence, contending that he did not breach Danish legislation. However, should the Glostrup district court in Copenhagen rule against him, he could potentially be sentenced to up to 12 years of imprisonment.
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In December, the United Arab Emirates extradited Shah to Denmark, marking the culmination of years of negotiations that included the signing of an extradition treaty between the two nations in March 2022.
The prosecution said in a statement that Shah had “used a well-designed and organised fraud scheme to submit more than 3,000 applications to unlawfully receive more than nine billion kroner in dividend tax refunds from the Treasury.”
In practice, foreign firms controlled by Shah pretended to own shares in Danish companies and fraudulently claimed dividend tax refunds.
“The size of the case, the complexity of the case, the international character of the case, plus the problems in having Mr Shah handed over to Denmark, is the explanation for why it has taken almost 10 years to get this case started,” one of Shah’s defence lawyers, Kare Pihlmann, told AFP.
Danish media have portrayed Shah as a father of three who flaunted his flashy lifestyle, while also raising money through charity concerts for an organisation he founded, “Autism Rocks”.
In a spectacular turnaround, Shah’s former assistant who was also charged in the case, Anthony Mark Patterson, recently decided to plead guilty to being an accomplice.
On March 1, the Briton was sentenced to eight years in prison. The court may call him as a witness in Shah’s case.
During his trial, Patterson said he was “thrown into deep water” as soon as he was recruited to Solo Capital, the investment fund Shah founded in 2013 and headed.
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“By the autumn, when I fully understood the internal work processes, I became aware of the trading patterns when we had to plan the trades for 2014,” Patterson told the court.
He expressed his “regret at having taken part” in the scheme.
Shah’s lawyer refused to comment on the details of the case but said his client was concerned about getting a fair trial in Denmark.
“Denmark has very, very good judges. Independent, professional. That’s not the problem,” Pihlmann said.
“The problem is that some government representatives, in particular cabinet ministers, have over the years made comments about the case, giving the impression that he is guilty of fraud,” he said.
“That is a possible violation of the presumption of innocence.”
The case has received widespread attention from the media in Denmark, underscoring the government’s pursuit of recovering its monetary resources.
When the indictment was announced in January 2021, the prosecution revealed that they had successfully seized approximately three billion kroner, which amounted to roughly a third of the total sum involved in the case.
“Generally … it is very difficult or almost impossible to get the money back. And as a rule, all seized assets must be shared with the country which carried out the actual seizure,” prosecutor Per Fiig said in a statement at the time.
As reported by the financial daily Borsen, Shah holds “billions” in several bank accounts, alongside properties in London. Among these assets is a London apartment acquired in 2012, now valued at around 125 million kroner, garnering the attention of Danish authorities.
A Dubai court’s verdict in May 2023 mandated Shah to compensate Denmark’s tax authority with upwards of $1.2 billion, concurrently with another trial unfolding in Britain.