Denmark’s Pursuit of Hedge Fund Trader ‘Politically Motivated,’ Judge Says
(Bloomberg) -- The 1.5 billion pound ($2.1 billion) trial against hedge fund trader Sanjay Shah and his associates was “politically motivated” and designed to “make an example” of those involved, a London judge said.
Judge Andrew Baker made a series of criticisms aimed squarely at the Denmark tax authority and politicians in a ruling on Tuesday. Last month, Shah won his bid to get the suit dismissed, after Baker said that the U.K. wasn’t the proper place to bring a foreign tax claim. The Danish agency said it would appeal.
“The litigation was brought and aggressively pursued, by a sovereign state with a willingness to expend effectively unlimited resources, as much to set an example to the world and make an example of all those involved,” Baker said in his ruling. “It was litigation that was politically as well as financially motivated.”
The London case was expected to be the longest in the U.K. High Court’s history and is just one avenue Denmark is pursuing in a bid to recoup massive tax rebates it says it unwittingly handed to Shah and others as part of the Cum-Ex scandal. The nation’s criminal prosecutor has also charged Shah, who lives in Dubai.
The Danish Tax Agency declined to immediately comment.
Danish politicians were also the target of stinging criticism for their commentary of the London trial in local press. The judge said that they were “playing to the gallery” to feed the significant media and public interest around the case.
The trial of Shah has played prominently in Danish media, with both the public prosecutor and the tax minister commenting on the case. Acting State Prosecutor Per Fiig has said that the severity of the case was such that Denmark would probably seek a penalty of 12 years behind bars for Shah -- a heavier sentence than such crimes would usually carry. The Danish tax authority has publicly referred to Shah as the “mastermind” behind the Cum-Ex scandal.
“They both confirmed, or reinforced, the impression that there was a substantial political dimension to the bringing and vigorous pursuit of the claims brought here,” he said.
The judge had previously raised this point at an earlier hearing on costs, but the tax agency’s lawyer insisted that it was separate to the Danish parliament or government.
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