Denmark's tax authority has launched an appeal in the UK courts over an alleged £1.5 billion ($2 billion) fraud by Dubai hedge fund trader Sanjay Shah.
The appeal comes after the legal action against Mr Shah and 70 other defendants, many of which are companies in the UK, was dismissed by London's High Court on the grounds that the UK was not the proper place to bring a foreign tax claim.
Mr Justice Andrew Baker, who dismissed the case last year, had said the case was “politically motivated” and designed to make an example of those involved.
Skat, the Danish tax authority, claims that Mr Shah was a central player in a scheme in which foreign businesses pretended to own shares in Danish companies, then claim tax refunds for which they were not eligible.
Skat is now appealing against the High Court's decision at London's Court of Appeal.
Mr Shah's legal team told the court this week that Skat is trying to hold the UK "to ransom".
Lord Justice Phillips and Lord Justice Stuart-Smith are hearing the appeal and are expected to make a decision at a later date.
The London case – which was expected to be the longest in UK High Court history – is just one avenue Denmark is pursuing in an attempt to recoup the rebates it says it unwittingly granted Mr Shah and others.
Mr Shah said his schemes were a “widely known and wholly legitimate trading strategy”.
Last year, Denmark brought criminal charges against Mr Shah and is seeking his extradition from Dubai.
Acting Danish state prosecutor Per Fiig said that the severity of the case was such that Denmark could seek a 12-year prison sentence for Mr Shah – a longer sentence than such crimes would usually carry.
In 2020, Danish authorities froze many of Mr Shah's assets, including a £15 million home near Hyde Park in London.
Last year, Mr Justice Andrew Baker said the case was "politically motivated".
"It was litigation that was politically as well as financially motivated," he ruled.
"The litigation was the subject of ill-judged public statements by senior Danish politicians appearing to pre-judge the factual issues that would have fallen to be determined by the court.
“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, in particular that their purpose was punishment and deterrence as much as it was financial recovery for the Danish taxpayer, and also involved a degree of 'playing to the gallery' in response to the significant media interest this affair has generated in Denmark.”
Mr Shah, who is British, moved to Dubai in 2009.
