British-Danish businessman Sanjay Shah has been extradited by the UAE to Denmark, where he is wanted for allegedly orchestrating a tax fraud and money laundering scheme worth £1.44 billion.
Shah, 52, was arrested in Dubai last year at the request of Danish authorities, who accused him of exploiting Europe’s tax systems for his personal benefit though his now-defunct hedge fund.
UAE state media said today: ‘UAE authorities today extradited accused Sanjay Shah, a British national, to Denmark, where he is wanted by judicial authorities for cases of tax fraud and money laundering.
‘Shah was extradited to Denmark’s security mission, according to legal procedures, based on a decision by the Court of Cassation in Dubai and the resolution by the Minister of Justice, who approved the extradition.
Shah is accused of running the scheme between 2012 and 2015, and was arrested by Dubai police last year following a request by Danish authorities to extradite him over the alleged fraud that has dogged him for years.
Sanjay Shah, 52, (pictured) was arrested in Dubai last year at the request of Danish authorities, who accused him of exploiting Europe’s tax systems for his personal benefit
The Danish Customs and Tax Authority (SKAT) wants to take back £1.44 billion from several defendants, including Shah and his hedge fund
The Danish Customs and Tax Authority (SKAT) wants to take back £1.44 billion from several defendants, including Shah and his hedge fund, who it alleges made fraudulent applications for tax rebates in what are called ‘Cum-ex’ trades.
He has consistently denied wrongdoing.
‘Cum-ex’, Latin for ‘with-without’, schemes, which flourished following the 2008 financial crisis, involved trading shares rapidly around a syndicate of banks, investors and hedge funds to exploit the tax systems of countries such as Denmark, Germany and Belgium.
Cum-ex trades worked when an allegedly fraudulent network would lend each other shares in large companies, so that tax authorities believed there were two owners of each share.
Banks used in the stock trade would then issue a receipt that would ‘confirm’ dividend tax had been paid on the transaction.
Cum-ex trades saw allegedly fraudulent networks quickly trade these shares just before the payout date for the dividend, which would allow them to reclaim double the taxes.
It is estimated that cum-ex trades cost ten European countries over 55 billion euros (£47 billion).
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.
The trader previously had his £14.7 million Hyde Park mansion seized by Denmark after being accused of the fraud.
Between 2022 and early 2023, he was involved in drawn-out litigation over whether he should be extradited to Denmark from the UAE.
After the Court of Appeal in Dubai initially rejected an extradition request by Denmark in September 2022, it later overturned that decision in December
This was upheld in April, though a timeframe for his extradition was not given.
In a separate ruling in September 2022, Shah was ordered to pay £1 billion to Denmark’s tax authority as part of a civil case in Dubai. His lawyers are also appealing against that ruling.
Last month, Shah lost a final bid to block Denmark’s tax authority from pursuing him and others in London over the alleged offences, in a ruling by the UK Supreme Court that cleared the way for a year-long civil trial to begin next April.
Investigations led by Germany and Denmark have triggered bank raids, arrests and prosecutions from some of the world’s most prestigious legal and financial institutions.
In 2018, Ulf Johannemann, a former managing partner at elite law firm Freshfields Bruckhaus Deringer was arrested and charged for allowing a client to reclaim €383 million in tax that was never paid.
A senior judge in Germany said this week that former Magic Circle lawyer Johannemann is ‘highly likely’ of being found guilty of this.
Denmark has charged nine British and US citizens over the schemes, which it says have cost it more than 12.7 billion Danish crowns.
MailOnline has reached out to Shah’s lawyers in the UAE for comment.