High Court dismisses SKAT鈥檚 拢1.4 billion cum-ex fraud claims
07 October 2025 UK
Image: AIGenerated
The High Court of England and Wales has dismissed the Danish tax authority鈥檚 拢1.4 billion case against Sanjay Shah and other defendants over alleged fraudulent dividend-tax refund claims linked to cum-ex trading.
In a 138-day trial concluded on 2 October 2025, Mr Justice Andrew Baker found that while the 4,170 refund claims made between 2012 and 2015 were invalid under Danish law, SKAT failed to prove it was induced by misrepresentation when making the payments.
The court found that SKAT鈥檚 internal refund controls were 鈥渟o flimsy as to be almost non-existent鈥�, concluding that the authority would have paid the claims regardless of the information provided.
Although the judgment acknowledges 鈥減ervasive collateral dishonesty鈥� among traders and intermediaries 鈥� including Shah鈥檚 former firm, Solo Capital Partners 鈥� the court ruled that dishonesty alone was insufficient to establish civil liability under English law.
SKAT alleged it had been misled into paying Danish krone 12.1 billion (US$1.89 billion) in dividend-tax refunds based on trades that purportedly involved shares held by non-existent investors.
Only one defendant, Syntax GIS, remains liable under a prior default judgment, with the court awarding SKAT DKK2.45 billion after accounting for recoveries.
The ruling comes less than two years after the UK Supreme Court allowed SKAT鈥檚 case to proceed, rejecting the argument that the 鈥榬evenue rule鈥� barred foreign tax claims in English courts.
However, Mr Justice Baker鈥檚 decision highlights the narrow pathway available for state claimants under English common law, particularly in distinguishing between invalidity and inducement in cases involving alleged fraud.
The court also observed that short selling activities from 1 November 2012 breached Article 12(1) of the EU Short Selling Regulation, though this finding did not alter the civil outcome.
SKAT has indicated that it intends to appeal the judgment.
In a 138-day trial concluded on 2 October 2025, Mr Justice Andrew Baker found that while the 4,170 refund claims made between 2012 and 2015 were invalid under Danish law, SKAT failed to prove it was induced by misrepresentation when making the payments.
The court found that SKAT鈥檚 internal refund controls were 鈥渟o flimsy as to be almost non-existent鈥�, concluding that the authority would have paid the claims regardless of the information provided.
Although the judgment acknowledges 鈥減ervasive collateral dishonesty鈥� among traders and intermediaries 鈥� including Shah鈥檚 former firm, Solo Capital Partners 鈥� the court ruled that dishonesty alone was insufficient to establish civil liability under English law.
SKAT alleged it had been misled into paying Danish krone 12.1 billion (US$1.89 billion) in dividend-tax refunds based on trades that purportedly involved shares held by non-existent investors.
Only one defendant, Syntax GIS, remains liable under a prior default judgment, with the court awarding SKAT DKK2.45 billion after accounting for recoveries.
The ruling comes less than two years after the UK Supreme Court allowed SKAT鈥檚 case to proceed, rejecting the argument that the 鈥榬evenue rule鈥� barred foreign tax claims in English courts.
However, Mr Justice Baker鈥檚 decision highlights the narrow pathway available for state claimants under English common law, particularly in distinguishing between invalidity and inducement in cases involving alleged fraud.
The court also observed that short selling activities from 1 November 2012 breached Article 12(1) of the EU Short Selling Regulation, though this finding did not alter the civil outcome.
SKAT has indicated that it intends to appeal the judgment.
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