Sanjay Shah, a British banker who in the past worked for Rabobank and ING, among others, must repay Denmark $ 1.7 billion plus 5 percent interest. He was sentenced today by the Supreme Court in the United Arab Emirates for setting up large-scale dividend tax fraud, the AP news agency reported.
The 52-year-old Shah is seen as the mastermind behind the so-called dividend stripping to defraud the Danish treasury. From 2012 to 2015, he set up constructions in which foreign companies with shares in Danish companies were wrongly refunded tax on dividends (profit distributions). This earned a total of $ 1.7 billion.
This money must now be paid back to the last penny, along with 5 percent interest. Shah, who fled to the Emirates, was arrested there last year and convicted of fraud after a trial. A court ruled in April that he may be extradited to Denmark. Before he is put on the plane, the Supreme Court already ordered him to pay back the 1.7 billion, plus interest.
Several European countries have been hunting for years for the mastermind and others involved behind what has been called the biggest tax scam in European history. In an interview with the Belgian business newspaper De Tijd two years ago, Shah said he has no regrets whatsoever. “I would get back into this business right away,” he said.
In Denmark, the conviction will be seen as a victory. “The Danish treasury has been defrauded for a staggering amount. It should not be possible for perpetrators to hide in the Middle East,” Justice Minister Mattias Tesfaye said last year when Shah was arrested in the Emirates after years of diplomatic wrangling . To the chagrin of the Danes, Shah lived undisturbed for years in a villa on the palm islands off the coast of Dubai.
Shah is said to have devised the scam after he started working at Rabobank’s investment bank in London in 2007 via Credit Suisse and ING. “During a chat at the bar or a round of golf, people talked about it, as if you were telling each other the secret recipe of Coca-Cola,” he told De Tijd about the discovery of dividend stripping. “People just did that, they didn’t think it was illegal. A big bank wouldn’t let its traders do anything illegal, right?”
After Shah lost his job at Rabobank in 2008, he founded the company Solo Capital to offer dividend stripping through London and Dubai. In 2016, he fled to Dubai after a raid on his London office.