Arrested at Danish request.
(Photo: Bloomberg/Getty Images)
Dusseldorf For many years Sanjay Shah was able to live undisturbed on the Palm Island in Dubai. He threw charity parties with superstars and sailed the Persian Gulf on his yacht. Those times are over: the police in the United Arab States arrested the multi-millionaire.
The background is an accusation by the Danish public prosecutor for fraud. Shah is suspected of causing billions in damage in Denmark by having the tax authorities reimburse him with capital gains tax from bogus stock transactions.
According to a press release from the Danish Ministry of Justice, the arrest was made in close cooperation with the UAE authorities. Danish Foreign Minister Jeppe Kofod attributed the coup to “diplomatic efforts. Among other things, negotiations were held with the embassy in Abu Dhabi and the consulate general in Dubai. “We continue the close dialogue with the authorities in the hope that Sanjay Shah will be extradited to Denmark soon,” Kofod said.
The Danes had already charged Shah in early 2021. Per Fiig, the Danish Attorney General for Serious Economic Crimes and International Crime, accused Shah and a second defendant of 3,000 individual counts. “This is a case of an extremely serious and extraordinarily extensive crime against the Danish state,” Fiig said at the time.
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Investigators speak of “carefully planned fraud”
The public prosecutor’s office is therefore not demanding the usual eight years in prison, but twelve. The two accused were guilty of “cynical and carefully planned fraud”.
The relief in Denmark after Shah’s arrest is great – also at the highest political level. “I am a very happy Minister of Justice. The arrest in Dubai underscores why it was so important that the government recently managed to secure an extradition deal with the United Arab Emirates. The Danish Treasury has been cheated out of a considerable sum and of course it must not be possible for the alleged perpetrators to hide in the Middle East and thus avoid being convicted in a Danish court,” said Justice Minister Mattias Tesfaye.
In Germany, too, the public prosecutors are after Sanjay Shah. The Hamburg public prosecutor has accused him of money laundering. The banker is said to have washed part of the loot from Denmark in Hamburg. In September 2015, the local Varengold Bank received 222 million euros from Shah’s environment. “Solo Payment to Elysium” was specified as the purpose. Solo Capital was the company of Sanjay Shah. Elysium was his too. At Varengold, Shah was a major shareholder and temporarily also a member of the supervisory board.
German prosecutors investigate
In addition, the Cologne public prosecutor’s office is investigating Shah on suspicion of tax evasion in connection with cum-ex transactions. Here, too, the accused was presumably concerned with having the German state reimburse him with capital gains tax that had not been paid.
Shah’s spokesman did not respond to a last-minute request. So far, Shah has denied any guilt and blamed the states for the massive tax damage. He called the fact that men like him were able to dig into the tax coffers for years “a system error”.
“We didn’t do anything illegal, we just took advantage of market opportunities,” Shah once told the Danish financial newspaper. German lawyers also told him that many people made a lot of money with these deals. “It was like they drive trucks into a warehouse and stock them with cash 24 hours a day,” Shah said.
In Germany, the legal situation has now been clarified. All courts say cum-ex deals were illegal and punishable by law. The Federal Court of Justice has already upheld two criminal convictions against bankers who participated in the deals. Most recently, Karlsruhe confirmed the five-and-a-half-year prison sentence for a former top manager at the Hamburg private bank MM Warburg.
More: Why the public prosecutor’s office is intensifying its investigations into Deutsche Börse