Danish tax authority loses £1.4bn hedge fund lawsuit in London

Denmark's tax authority lost a £1.4bn lawsuit against Sanjay Shah's hedge fund at the High Court last week following its attempts to recoup huge tax losses from cum-ex schemes.

Shah launched Solo Capital Partners in 2009 but the firm went into administration in 2016 following accusations of dividend tax fraud between 2012 and 2015.

The Danish tax authority – Skatteforvaltningen or ‘Skat’ – then sued Shah and Solo Capital Partners in 2018 for the fraud and the trial began last year.

In the interim, Shah was extradited from Dubai in 2023 and jailed for 12 years in Denmark in 2024 having been found guilty of a similar crime.

Last week (2 October), Judge Andrew Baker ruled the tax refund claims admitted to court were not valid under Danish tax law and that Skat was not obligated to pay them, but said that due to the authority’s flimsy controls Shah and others were able to extract a fortune.

The Danish government said its tax authority will appeal the judgement.