The fraud trial of a British hedge fund dealer famend for throwing extravagant events and internet hosting stars corresponding to Prince at charity live shows has begun.
Sanjay Shah is considered one of 9 British and US nationals accused of defrauding Denmark out of $1.8bn (£1.4bn) by main tax evasion and avoidance schemes.
The so-called cum-ex schemes had been designed to use weaknesses in nationwide tax legal guidelines and centered on enormous share trades, which had been carried out with the only function 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 Companions, 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 had been delivered after the dividend date (ex-dividend).
The follow 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.
So as to maximise the potential positive aspects, elaborate constructions had been constructed which allowed enormous portions of shares, typically borrowed, to be handed in a round method between a variety of completely different events. The constructions had been designed to take away market threat and to disguise what was happening.
The rip-off started to collect momentum in Germany within the early 2000s, till the authorities there clamped down on the follow.
It later unfold to different jurisdictions, notably Denmark. The UK was not a significant goal for the rip-off however most of the trades themselves had been orchestrated from London.
The Denmark authorities has mentioned cum-ex schemes have value it greater than 12.7bn Danish crowns ($1.8bn) between 2012 and 2015.
On the opening of Mr Shah’s trial, prosecutor Marie Tullin requested the courtroom to confiscate belongings belonging to him price 7.2bn Danish crowns, which included an inventory of properties principally within the UK.
He grew to become famend for throwing extravagant events, whereas celebrities corresponding to Prince and Ricky Martin agreed to carry out at live shows for an autism charity he based.