In trust we trust
20 December 2024
It was not quite Friday the 13th, but for British hedge fund trader Sanjay Shah, Thursday the 12th was unlucky enough. After years on the run from the Danish authorities, Shah was finally handed his sentence: 12 years in prison – the country’s heaviest penalty ever given out for economic fraud.
Basically, over the course of three years, Shah orchestrated a scheme that defrauded the Danish state of 12.7 billion Danish kroner (€1.7 billion). This involved using a practice known as “cum-ex” trading, where through several companies, he rapidly bought and sold the same shares around the time of dividend payments. The idea was that, by doing this, he could claim the same dividend tax refund several times, even though the tax had only been paid once.
Shah insists he did not commit fraud, claiming he simply used a loophole in the Danish system. By all accounts, it does seem to have been quite easy. At the time, the Danish Tax Agency had one single employee who was responsible for assessing and approving all applications. That person did not even check the documents’ accuracy. However, this case is about more than bringing back the billions. It is about trust.
 | Erica Bernsten Strange With nearly 74% of Danes believing “most people can be trusted” – more than any other nationality – trust is a cornerstone of Danish society. Even the country’s official website calls it “the land of trust.” This fundamental belief is also woven into the Danish tax system, where citizens contribute nearly half of their income. So, when someone like Shah swoops in and exploits the system for personal gain, it feels like more than a financial loss – it is a betrayal of that trust. Shah’s conviction is not the end of the story: he appealed the decision on the spot, and the legal battle could drag on for years. Nevertheless, it is a step toward mending that broken trust for now. |
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