The criminal trial of a British hedge fund trader charged with defrauding the Danish state of $1.8 billion began on Monday.
Sanjay Shah, the main suspect in the so-called ‘cum-ex’ case, denies any wrongdoing, while prosecutors say he has fraudulently obtained a refund of dividend tax from the Danish treasury.
They accuse him of doing so via trading schemes that flourished following the 2008 financial crisis.
At the opening of the case, prosecutor Marie Tullin asked the court to confiscate assets belonging to Shah worth 7.2 billion Danish crowns, including a long list of real estate, mostly in the UK.
Shah, dressed in a black sweatshirt, black trousers, and yellow Adidas sneakers, was not due to testify on Monday, as Tullin said she would use the first day in court to go through some of the 300,000 legal documents in the case.
Shah is charged under an article in the Danish criminal act that could carry up to 12 years in prison.
Shah's lawyer Kaare Pihlmann told the court that his client was worried he would not get a fair trial due to past comments by the Danish justice minister implying his guilt.
The judge in the Copenhagen city court denied a request by Pihlmann to dismiss the case
Denmark has charged nine British and US citizens over the so-called “cum-ex” schemes, which it says cost it more than 12.7 billion crowns ($1.85 billion) between 2012 and 2.015
Main suspect Shah, founder of London-based hedge fund Solo Capital Partners, was arrested in Dubai in 2022 and extradited to Denmark in December where he is still being held in custody.
The 'cum-ex' schemes involved trading shares around a syndicate of banks, investors and hedge funds immediately before the dividend payout date, allowing traders to reclaim double the taxes.
"He is innocent," Shah's media and political adviser, Jack Irvine said on Friday. "The Danes themselves didn't understand their own tax law, that's the problem," he added.
Shah's lawyer was not immediately available for comment.
Denmark, Germany and Belgium were particularly hard hit, and the practice is considered illegal in most countries.
The criminal proceedings will primarily act as a deterrent, while the state in a separate civil case, which is set to begin later, aims to recoup the money it says it has lost in the cum-ex case.
"There is a deterrent element if authorities can show that they're not just interested in getting the money back in situations like this, but they're interested in putting people behind bars," said Neil Swift, a lawyer specialising in business crime at Peters & Peters.
The state aims to recoup the money it says it lost in a separate civil case, which is set to begin later.
The Danish state's legal advisor has said it is not possible to assess how much it will be able to retrieve, and has estimated that the costs for legal proceedings between 2017 and 2029 could amount to 4.3 billion crowns.
The Danish tax authority has filed civil lawsuits against roughly 500 companies and individuals in the US, Britain, Dubai, Malaysia, Canada and Denmark, in addition to pressing criminal charges.
A crackdown has triggered bank raids, criminal proceedings and litigation.
Anthony Mark Patterson, who is seen as Shah's closest accomplice, was in February sentenced to eight years in prison by a Danish court in the country's first criminal cum-ex trial.
Patterson, who confessed to helping defraud tax authorities of around 8.4 billion Danish crowns, has been called as a witness in the Shah case, prosecutors have said.
More than 50 court hearings are scheduled for Shah's case between Monday and June 2025.
