Hedge fund trader Sanjay Shah and scores of others face a 1.4 billion-pound ($1.9 billion) lawsuit over Cum-Ex trades again, after Danish tax officials won their bid to revive the case.
The suit had been thrown-out by a lower court at an early stage because a judge said the U.K. wasn’t the proper place to bring a foreign tax dispute. While a ruling in the substantive case is a long way off, Denmark’s successful appeal against that decision boosts its efforts to claw back billions that officials say were lifted from state coffers.
Shah’s spokesperson declined to comment on the ruling.
The case against Shah and over 100 other defendants, accuses traders of earning vast sums of money from the nation’s tax authority by using a loophole on dividend payouts to reap duplicate tax refunds. Denmark accuses Shah, whom they’ve also charged, of being the “mastermind” of the scheme. Shah has repeatedly said he did nothing illegal.
Denmark’s “claim is not one for repayment of tax or otherwise a claim to enforce a sovereign right, but a claim as a victim of fraud to reimbursement of the monies of which it has been defrauded,” Judge Julian Flaux said in Friday’s ruling.
The Danish tax authority known as “Skat,” said in a statement it was satisfied with the ruling and looks forward to the next stages in the case. It said the amount it had to pay when it lost the case last year will be refunded in relation to its successful claims.
The Court of Appeal ruled Friday that the case couldn’t be brought against one defendant in the case, brokerage firm ED&F Man Capital Markets, which wasn’t accused of dishonesty.
— With assistance from Frances Schwartzkopff and Morten Buttler
