Trial of British hedge fund dealer accused of £1.4bn fraud begins

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Trial of British hedge fund dealer accused of £1.4bn fraud begins

The fraud trial of a British hedge fund dealer famend for throwing extravagant events and internet hosting stars akin to Elton John at charity live shows has begun.

Sanjay Shah is one among 9 British and US nationals accused of defrauding Denmark out of $1.8bn (£1.4bn) via main tax evasion and avoidance schemes.

The so-called cum-ex schemes have been designed to use weaknesses in nationwide tax legal guidelines and centered on large share trades, which have been carried out with the only objective of producing a number of refunds of a tax that had solely been paid as soon as.

Mr Shah, the founding father of London-based hedge fund Solo Capital Partners, denies any wrongdoing.

He has been held in custody in Denmark since being extradited to the nation following his arrest in Dubai in 2022.

Prosecutors alleged that Mr Shah, the principle suspect within the case, fraudulently obtained a dividend tax refund from the Danish treasury by way of the buying and selling schemes that flourished following the 2008 monetary disaster, Reuters reported.

So-called cum-ex trades concerned the sale of shares from one investor to a different instantly earlier than the fee of a dividend to shareholders (cum, or with, dividend), whereas they have been delivered after the dividend date (ex-dividend).

The observe enabled each events to assert refunds of withholding tax – though the tax itself, charged on the dividend at supply, would solely have been paid as soon as.

In order to maximise the potential positive factors, elaborate constructions have been constructed which allowed large portions of shares, typically borrowed, to be handed in a round method between a variety of totally different events. The constructions have been designed to take away market threat and to disguise what was happening.

The rip-off started to assemble momentum in Germany within the early 2000s, till the authorities there clamped down on the observe.

It later unfold to different jurisdictions, notably Denmark. The UK was not a serious goal for the rip-off however lots of the trades themselves have been orchestrated from London.

The Denmark authorities has stated cum-ex schemes have price it greater than 12.7bn Danish crowns ($1.8bn) between 2012 and 2015.

At the opening of Mr Shah’s trial, prosecutor Marie Tullin requested the courtroom to confiscate property belonging to him price 7.2bn Danish crowns, which included an inventory of properties largely within the UK.

He grew to become famend for throwing extravagant events, whereas celebrities akin to Prince and Elton John agreed to carry out at live shows for an autism charity he based.

With inputs from BBC

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