Dubai police say they have arrested and plan to extradite a British man wanted in Denmark over a $1.7bn tax scheme, one of Denmark’s largest-ever fraud cases.

The arrest of hedge fund trader Sanjay Shah, 52, follows after Danish officials signed an agreement in March allowing for extradition between the United Arab Emirates and Denmark.

Dubai Police confirmed the arrest in a tweet on Friday, in which it said the aim was to extradite Shah for prosecution in Denmark.

In a statement, Dubai police Brigadier General Jamal al-Jallaf said that the emirate received an international arrest warrant from Denmark for Shah, who is accused of a fraud that saw foreign businesses pretend to own shares in Danish companies and claim tax refunds for which they were not eligible.

“The fraud scheme, known as ‘cum-ex’ trading, involved submitting thousands of applications to the Danish Treasury on behalf of investors and companies from several countries around the world in order to receive dividend tax refunds,” al-Jallaf said.

Danish authorities say the scheme ran for some three years beginning in 2012.

Shah has maintained his innocence in interviews with journalists while living in Dubai during the last few years, but he has never appeared in Denmark to answer the accusations. It was not immediately clear if Shah had a local lawyer in the Emirates.

A court date did not appear to have been immediately set in Dubai, and prosecutors did not immediately respond to a request for comment on Friday.

In a joint statement on Friday, Denmark’s justice and foreign Ministries praised Dubai’s arrest of Shah, whom they described as a target of the country’s prosecutors since 2015.

“The Danish Treasury has been cheated for a staggering amount, and of course, it should not be possible for suspected perpetrators to hide in the Middle East and thus avoid being held accountable in a Danish courtroom,” Justice Minister Mattias Tesfaye said.

“Now I am awaiting the legal process in the United Arab Emirates, and crossing my fingers that it will end up that we can get Sanjay Shah on a plane to Denmark, so he can be prosecuted in this country,” he added.

“We will push for an extradition as soon as possible,” Danish Foreign Minister Jeppe Kofod wrote in a tweet on Friday.

Shah is one of several suspects in the tax scheme sought by Danish authorities.