Denmark loses £1.4bn fraud battle against Sanjay Shah in UK High Court

Denmark’s attempt to recover £1.4 billion from convicted fraudster Sanjay Shah has failed at the High Court in London, marking one of the most high-value legal defeats in recent British judicial history. The case centered on the Scandinavian nation’s claim that Shah, a British hedge fund trader, and his firm Solo Capital exploited a dividend tax loophole that allegedly deprived Danish coffers of £1.44 billion in taxes due on share dividends.

Shah, who was extradited from Dubai in 2023 and sentenced in December 2024 by a Danish court to 12 years in prison for his role in the elaborate fraud, has maintained that he merely took advantage of an existing legal gap. He is appealing the Danish conviction, with a new hearing set for November 2026. Danish authorities had previously frozen Shah’s £14.7 million mansion near Hyde Park as part of their probe.

The core of the case involved a scheme allowing traders to claim multiple tax rebates on a single stock dividend. This complex arrangement, part of the so-called cum-ex scandal or ‘dividend stripping’, allowed several parties to request the same tax refund numerous times without actual tax being paid, costing national treasuries across Europe billions. In Germany, similar strategies are thought to have drained more than €10 billion (£8.7 billion) in public funds.

In the London trial, Denmark’s tax agency, Skat, argued that it had been misled by misrepresentations, but Mr Justice Andrew Baker of the High Court dismissed these claims. He criticised the internal controls of the Danish tax authority, describing them as “so flimsy as to be almost non-existent”. He also noted that Mr Shah’s actions stopped short of explicit deception, stating there were no false statements made to the Danish authorities.

The High Court judge further highlighted the Danish authority’s “sprawling, imprecise and badly structured” legal pleadings, which posed ongoing issues for the proceedings. Danish officials have announced their intention to appeal the outcome.

This ruling is the latest twist in the protracted investigation into international dividend fraud schemes, putting the spotlight on the responsibility of financial regulators. It raises complex questions about the line between aggressive tax planning and criminal activity, and whether governments have the oversight necessary to protect public funds.