CL-2018-000297, CL-2018-000404, CL-2018-000590, - [2025] EWHC 2364 (Comm)

There is an awkwardness about expressing as a finding that a defendant knew that a representation was false, or did not have an honest belief in its truth, where the defendant in question did not realise that the representation was being or had been made in the first place. In relation to the tax representation and the dividend payment representation, the position is relatively straightforward, but still since my finding is that Mr Shah did not at the time understand that the representation would be or was being made, I prefer to express myself as follows:

The position in relation to the tax ownership representation and the dividend entitlement representation is more complicated, because they are, as alleged, representations as to a status or characterisation under Danish tax law which in relevant respect operated on a fiction. It therefore does not follow from Mr Shah’s undoubted knowledge that the Solo Model USPFs and LabCos were not shareholders on the dividend declaration date that he knew they would not be treated as such under Danish tax law by virtue of the trade date of their equity purchases.

The publicly available materials from SKAT and Clearstream, along with the First HS Advice, might reasonably have led Mr Shah (likewise Mr Horn and Rajen Shah) to believe that a cum-ex buyer of Danish shares who acquired a shareholding upon settlement of their purchase would be treated under Danish tax law as having been the shareholder as from the trade date of the purchase. They would not have had reason to suppose that it made any difference whether the seller was short or long on the trade date, or, if the seller was short then, when precisely prior to settlement the seller acquired shares, or an entitlement or effective ability to have shares transferred to the buyer, so that the trade settled successfully as it did, DVP.

However, none of that gave Mr Shah (or, again, Mr Horn or Rajen Shah) any basis for thinking that Danish tax law might treat a buyer who never acquired shares as having nonetheless been a shareholder. Nothing in any publicly available material, or any market practice, or the advice from Hannes Snellman, gave reason to think that the entirely synthetic world created by the Solo Model, in which there were no shares at all, ever, was a world in which Danish tax law would say that the Solo Model equity buyers, the USPFs and later the LabCos, were nonetheless to be treated as having been shareholders, at any time.