Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
A British hedge fund trader who is the chief suspect in the Danish part of the sprawling “cum-ex” dividend scandal has been extradited from Dubai to Denmark to face criminal charges.
Sanjay Shah, who is accused of defrauding Denmark of about DKr9bn ($1.3bn), landed in Copenhagen on Wednesday, marking the end of an extradition battle a year after he was arrested in Dubai.
“Today is a very good day to be minister of justice,” said Peter Hummelgaard in Copenhagen. He added: “The dividend case is an important one for Denmark, and it is one of the largest and most serious criminal fraud cases. It is our public money, our welfare state and our trust-based society that are at stake.”
Denmark, Germany, Italy and France are among the European countries hardest hit by the cum-ex scandal, in which governments were duped into refunding billions of euros of dividend taxes that had never been paid.
Shah denies any wrongdoing, insisting that he exploited loopholes in Danish law to receive the money.
“The extradition process has been slow, opaque and haphazard . . . We are relieved that the uncertainty is now over and that Sanjay Shah is finally on his way to Denmark,” his Danish lawyers said earlier on Wednesday.
Lars Løkke Rasmussen, Denmark’s foreign minister, said it had taken a huge diplomatic effort to ensure Shah could stand trial, including the signing of an extradition agreement last year between the Scandinavian country and the United Arab Emirates.
“With the extradition we are sending an important signal that you cannot achieve impunity by staying abroad,” he added.
Denmark alleges it was defrauded a total of DKr12.7bn in the cum-ex scandal, and has brought charges against nine people. Skat has also brought a £1.4bn civil lawsuit in London against more than 100 financial institutions, as well as Shah and Patterson, for lost tax payments that the Danish tax authority says represent the proceeds of unlawful reclaiming of tax between 2012 and 2015.
Prosecutors in Germany are investigating 1,500 people over the cum-ex scandal in a long-running investigation involving bankers and lawyers from many firms.
The former global head of tax at Freshfields Bruckhaus Deringer, Ulf Johannemann, was told this week by a senior judge in Frankfurt that it was “highly likely” he would be found guilty of aiding and abetting fraud. Johannemann, who has not yet addressed the allegations in court, could face a multiyear jail sentence if found guilty by a panel of five judges.
Shah’s extradition marks a success for the UAE government, which has been boosting efforts to co-operate with international law enforcement relating to money laundering.
The UAE was in 2022 placed on the Financial Action Task Force’s so-called grey list of countries requiring enhanced monitoring for money laundering. The UAE hopes to come off the list next year after ratcheting up financial compliance measures, including increasing the number of prosecutions for financial crimes and assisting global law enforcement.
Dubai for decades acted as a popular haven for financial criminals but in recent years the signing of new extradition treaties and the government’s compliance drive have made the city a less permissive environment.
Read the full article here
