Headlines
Danish tax authority loses $1.9 billion London 'cum-ex' tax fraud case
Published by Global Banking and Finance Review
Posted on October 2, 2025
3 min readLast updated: January 21, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on October 2, 2025
3 min readLast updated: January 21, 2026
Denmark's tax authority lost a $1.9 billion lawsuit in London against Sanjay Shah over cum-ex fraud, with plans to appeal.
By Sam Tobin and Kirstin Ridley
LONDON (Reuters) -Denmark's tax authority lost a 1.44 billion pound ($1.95 billion) London lawsuit on Thursday against Sanjay Shah's hedge fund and others for defrauding the Nordic state, 10 months after a Danish court sentenced the Briton to 12 years in prison.
Skatteforvaltningen (SKAT) sued Shah and his Solo Capital hedge fund at London's High Court in 2018, alleging at a trial which began last year that Shah and Solo were responsible for the bulk of its claims.
But Judge Andrew Baker ruled that the authority had not been misled into paying tax refund claims and that Shah and others did not try to trick the authority into paying for "cum-ex" dividend trading strategies between 2012 and 2015.
SKAT'S CONTROLS BLAMED
Instead, he blamed SKAT's controls, which he described as "flimsy".
"The judgment finds that SKAT was not misled into paying by misrepresentations made to it through the tax refund claims it received, as it alleged," he said in a summary of his ruling.
"Its controls for assessing and paying dividend tax refund claims were so flimsy as to be almost non-existent."
Cum-ex schemes, which flourished following the 2008 financial crisis, involved trading shares rapidly around a syndicate of banks, investors and hedge funds before and after a stock's dividend payment to exploit loopholes in the tax systems of countries such as Denmark, Germany and Belgium.
SKAT is seeking an appeal.
"The Tax Authority strongly disagrees with the premises of the judgment and is now seeking to appeal it," the Danish government agency said in a statement.
SKAT has been pursuing Shah for years, forcing his extradition from Dubai in 2023 and launching a civil lawsuit in London and a parallel criminal case in Denmark.
Chris Waters, a lawyer at Meaby & Co who represents Shah, his family and companies, said the case should never have been brought.
"Today's judgment is not only an overwhelming victory for Sanjay Shah and the Shah defendants, but it is also a catastrophic loss for SKAT.
"SKAT has failed in every aspect of its claim."
Shah was sentenced to 12 years in prison by a Danish court last December after being convicted of a 9 billion Danish crown ($1.4 billion) dividend tax fraud through cum-ex trading.
($1 = 6.3681 Danish crowns)
($1 = 0.7399 pounds)
(Reporting by Sam Tobin and Kirstin Ridley, additional reporting by Terje Solsvik in Oslo; Editing by Sarah Young and Emelia Sithole-Matarise)
Cum-ex trading strategies involve trading shares rapidly around dividend payments to exploit tax loopholes, allowing investors to claim refunds on taxes they never paid.
Corporate tax is a tax imposed on the income or profit of corporations, which varies by jurisdiction and is typically calculated as a percentage of taxable income.
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