Danish Court Rules in Favor of Pre-Trial Detention for  Hedge-Fund Trader Sanjay Shah

(Bloomberg) -- A Danish court has ruled that hedge-fund trader Sanjay Shah and an associate should be detained before their trial begins, after the two were charged with tax fraud as part of a wider Cum-Ex investigation.

The decision, which was widely expected and announced by multiple local media outlets on Wednesday, paves the way for Denmark to seek formal extradition of Shah, who lives in Dubai, and his alleged accomplice, Anthony Mark Patterson, whose address is in the U.K. Both were charged earlier this year for their roles in claiming what police say were illegal refunds on dividend taxes.

There’s reason to believe that neither Shah nor Patterson will come to Denmark to participate in the criminal case, newswire Ritzau cited one of the judges present as saying.

“Sanjay has always said he’s willing to come and face trial but he’s not going to sit in prison for two years, waiting for the prosecutor to get his act together,” said Jack Irvine, Shah’s spokesman, by phone. Shah’s lawyers will be appealing the decision, he said.

While Denmark’s state prosecutor has referred to the setup as a “cynical and meticulously planned fraud,” Shah and Patterson have maintained their innocence, arguing that the tax refunds they obtained were legal.

Denmark says Shah got at least 80% of around 9 billion kroner ($1.4 billion) in tax refunds as part of a scheme in which he traded shares on behalf of pension funds that either didn’t exist or that weren’t entitled to such claims. Patterson acted as his assistant in those trades, Danish authorities say.

The Cum-Ex practice, named for the Latin term for “With-Without,” took advantage of tax laws that seemed to allow multiple investors to claim refunds on a dividend that was paid only once.

Story Link: Danish Court Rules in Favor of Pre-Trial Detention for Shah: RBB

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