Niall Hearty details how Denmark has settled with a former Barclays director and four companies in £1.4 billion case.
The Danish tax authority Skat has settled its claim against a former Barclays Capital director and four companies that it sued over a £1.4 billion Cum-Ex scheme.
Darren Wang Yip Lui and the four companies settled with Skat as part of a confidential agreement, according to a High Court order that has now been made public.
The settlement comes during a High Court trial that began in April. Lui and the companies were among dozens of defendants being sued by Skat over Cum-Ex. Cum-Ex was a share trading practice that saw more than one party claiming tax rebates on capital gains tax, even though that tax had only been paid once at most. Lui and the companies had denied participating in any fraudulent scheme.
Skat has accused Sanjay Shah, the British trader and founder of hedge fund Solo Capital Partners LLP, of masterminding the Cum-Ex scheme. Many other traders and companies are also accused by Skat of making misrepresentations on applications for rebates that defrauded Denmark out of billions of krone.
Lui, a qualified chartered accountant, worked for Barclays Capital between 2005 and 2013 and was a director at Barclays Investment Bank. He resigned from Barclays and agreed to take a job at Solo Capital, though he instead worked with a firm called Elysium Global. Lui said in his defence that he believed that Elysium and Solo Capital were legitimate businesses.
Skat's case is based on the allegation that Shah and the others it is suing never held any shares in the companies for which they were claiming rebates. It should be emphasised that Lui and the companies connected to him who reached settlement do not account for all those pursued by Skat in the High Court. It is also important to note that by accepting the settlement they have continued to deny participating in a fraudulent scheme.
But the settlement may give comfort to those yet to face civil proceedings over Cum-Ex. Reputational management concerns may mean that we will see more settlements in the future, arising out of these proceedings and any others that may be brought.
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