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Hedge Fund Founder Involved in £1.44 billion Tax Fraud Case

Published by Prerana
Posted Date: May 23, 2024 , Modified Date: May 24, 2024

A UK hedge fund founder is accused of being the main player in a £1.44 billion dividend tax fraud against Denmark. The founder is a mastermind who followed the cum-ex strategy to execute his fraud. However, he claimed in a London court on Tuesday that he was an honest man and trader who only followed others' legal and tax advice.

What Is Cum-Ex Strategy?

The cum-ex trade scheme is a strategy that involves exploiting a loophole in the tax system, especially in European countries. This strategy is adopted to avoid paying tax on dividend payments. To do so, various company founders move their stocks from one country to another. This strategy became popular after the 2008 financial crisis.

European countries such as Germany, Denmark, Austria, and others are major victims of this trade strategy. Germany claims it has lost almost £30 billion in revenue due to this.

Furthermore, there are various individuals and financial institutions that are affected. The total estimated loss in revenue is approximately £55.2 billion.

Investigations of the UK Hedge Fund Founder

The UK Hedge Fund founder is a British citizen and a Dubai-based trader who is accused of using the cum-ex strategy against Denmark. Using this strategy, he was successful in avoiding the dividend tax, bought himself a Ferrari, and paid himself a £19 million bonus.

tax fraud

The Hedge Fund founder was accused of tax fraud in May 2023 but claims he was an honest trader on the court. In addition, he says that the trade scheme is legal due to defects or loopholes in the system. He was questioned by the tax authority of Denmark, Skatteforvaltningen (SKAT).

The founder has pleaded not guilty to his charges of the £1.44 billion tax fraud between 2012 and 2015. Additionally, the verdict of his trial is suspected in June 2025.

Conclusion

A Hedge Fund founder holding British citizenship has been accused of major tax fraud following a cum-ex scheme against Denmark. He avoided dividend tax payments successfully. However, he claims he is an honest man and has pleaded not guilty to the charges. His trial verdict, set to take place in 2025, has many tax and financial experts invested in the case.

Prerana
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