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A British man wanted in Denmark over a 1.7 billion dollar (£1.3 billion) tax scheme, one of the country’s largest-ever fraud cases, has been arrested in Dubai and is set to be extradited.
The arrest of hedge fund trader Sanjay Shah came after Danish officials signed an agreement in March allowing for extradition between the United Arab Emirates and Denmark.
Shah has maintained his innocence in interviews with journalists while living in Dubai over the last few years on the city-state’s manmade Palm Jumeirah archipelago, but never appeared in Denmark to answer the accusations.
Danish authorities say the scheme ran for some three years beginning in 2012.
It was not immediately clear if Shah, 52, had a local lawyer in the Emirates, but MailOnline has approached his last known representative for comment.
Shah has maintained his innocence in interviews with journalists while living in Dubai over the last few years on the city-state’s manmade Palm Jumeirah archipelago, but never appeared in Denmark to answer the accusations
Sanjay Shah poses for a photograph on the Palm Jumeriah in Dubai, United Arab Emirates, in Sept. 29, 2020. Dubai police said Friday, June 3, 2022, they arrested and planned to extradite Shah, a British national, to Denmark
A court date did not appear to have been immediately set in Dubai, the commercial capital of the seven-sheikhdom federation of the UAE.
Prosecutors did not immediately respond to a request for comment on Friday, the start of the Emirati weekend.
The hedge fund manager had run a centre for autistic children in Dubai that shut down in 2020 amid the attempts by Denmark to extradite him.
He also ran the British-based charity Autism Rocks, which put on shows by major performers to raise money.
In a statement, Dubai police Brigadier General Jamal Al Jallaf said the emirate received an international arrest warrant from Denmark for Shah.
Brig Gen 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.
In a joint statement, Denmark’s justice and foreign ministries praised Dubai’s arrest of Shah, whom they described as a target of the country’s prosecutors since 2015.
Shah is one of several suspects in the tax scheme sought by Danish authorities, described as one of the largest fraud cases in the country’s history.
The trader previously had had his £14.7million Hyde Park mansion seized by Denmark after being accused of the fraud.
Danish authorities in 2020 announced they had expropriated the property following the exposure by news outlets in continental Europe of the owner’s huge tax fraud scheme.
A spokesman for Shah at the time called Denmark’s move ‘gesture politics’.
Papers filed to London’s High Court (pictured) on behalf of Denmark’s tax authority in 2018 described Shah as ‘the primary individual said to be responsible for the fraudulent scheme’. Shah’s lawyers rejected the allegations in a 204-page defence
Denmark’s tax authority Skat claims that it had been tricked into paying multiple refunds to British agents between 2012 and 2015, with around £800million ending up in Shah’s then-operating hedge fund, Solo Capital.
Papers filed to London’s High Court in 2018 described Shah as ‘the primary individual said to be responsible for the fraudulent scheme’.
Shah’s lawyers rejected the allegations in a 204-page defence, arguing: ‘Solo Capital Partners provided clearing services for clients to engage in lawful and legitimate trading strategies that were conducted at all times in accordance with Danish law: doing so was neither dishonest nor unlawful.
‘This case has caused significant embarrassment to Skat and to the Danish government generally, particularly because dividend arbitrage trading is a widely known and wholly legitimate trading strategy.
‘Other European governments have taken steps to limit such trading activity.
‘Skat is attempting retrospectively to amend Danish fiscal law and to cover up or remedy Skat’s earlier failure to limit such trading activity and thereby attack the defendants, who have done nothing dishonest nor illegitimate.’
Mr Shah’s spokesperson said that he would not return to the UK to give evidence.
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