Hedge-Fund Trader Shah Now Faces Cum-Ex Charges in Germany
(Bloomberg) -- Sanjay Shah, the founder of hedge-fund Solo Capital Partners LLP, was charged in Germany with money laundering over trades linked to the Cum-Ex tax scandal.
Shah and six others were indicted by Hamburg prosecutors, Liddy Oechtering, a spokeswoman for the authority, said on Monday. Shah is charged with 55 counts of money laundering, she said.
The indictment is linked to a 9.6 billion-krone ($1.5 billion) tax probe in Denmark, where Shah already faces criminal charges. Tax officials in that country describe Shah as the “mastermind” of a fraud tied to the controversial Cum-Ex strategy where traders took advantage of legal loopholes to obtain duplicate dividend tax rebates.
“The case is about laundering profits from tax fraud” in Denmark and Belgium “by filing tax-refund claims with untrue statements about dividend-arbitrage trades and, in part, distorted misrepresentation of the crucial points,” Oechtering said.
A spokesman for Shah said the charges were “expected,” but “we question the merit as the German court is not competent to decide on Danish tax matters.” He said Shah is in Dubai and hasn’t been arrested as part of any investigation.
Oechtering declined to identify the other suspects. All have British citizenship, while some live in Dubai and some in London, she said.
The Hamburg case covers conduct from December 2011 and September 2015, when the transactions were already banned in Germany. A spokesman for the Danish prosecutor said that it has been working with authorities in other countries, including Germany on the Cum-Ex case.
Germany is looking at as many as 1,000 suspects from across the financial industry, while Denmark has moved more slowly to take criminal action after learning international financiers took billions from state coffers by allegedly falsely claiming refunds on dividend taxes.
In addition to the criminal cases, Shah and his associates also face civil lawsuits brought by Danish officials in the U.K. and Dubai. The first London trial begins next week.
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