Danish police have frozen a £14.7m mansion near Hyde Park, in central London, owned by Sanjay Shah, a British multi-millionaire businessman accused of defrauding Danish taxpayers out of £1.5bn.

Denmark’s serious economic and international crime police department said on Monday it had frozen the property owned by a suspect “believed to have scammed more than 12bn Danish kroner (£1.5bn)”. The Danish authorities did not identify the suspect.

However, the Guardian can confirm that the property is owned by Sanjay Shah, a 50-year-old former hedge fund boss who is living in Dubai. Denmark has been pursuing Shah for five years over a complex tax fraud.

A spokesman for Shah, who lives on a private island in Dubai’s Palm Jumeirah development, confirmed that his London mansion had been frozen.

The spokesman, Jack Irvine, said it was “mysterious” that Denmark had announced the freezing today given that the authorities took control of the house months ago. Irvine said Shah denies any wrongdoing. The claims are subject to a civil case at London’s high court brought against Shah by Denmark’s tax authority, Skat.

In a high court filing in 2018, Shah was described by Skat as “the primary individual said to be responsible for the fraudulent scheme”. Irvine said Shah, who was born in London, would not return to the UK to give evidence, fearing extradition to Denmark.

Shah has entertained global superstars in Dubai, where he used to drive around in a white Rolls Royce.

He established Autism Rocks, a charity he set up to raise money for autism research, and put on charity concerts featuring artists including Elton John, Snoop Dogg, Prince, Ed Sheeran and Jennifer Lopez. He also founded a festival in Dubai called Blended, which has featured the BackStreet Boys, Melanie C and Lemar. He is said to own a total of six homes on the Palm Jumeirah, where he had also moored a £1m yacht.

“I regret buying my yacht,” he told the United Arab Emirates newspaper The National in 2017. “It cost £1m and, like a brand-new car, you’ve lost half the value as soon as you try to sell it. It’s moored on the Palm Jumeirah, not far from us, and I have a licence to sail, but it’s far enough that we have to drive to it in summer, remember to take food and drink with us, hire a captain and deck hand for the day if I don’t want to sail myself, and plan around the kids’ activities at the weekend … It’s for sale, but no one is buying.” Irvine said he had subsequently sold the yacht.

Shah is accused by Denmark of making bogus claims via his hedge fund Solo Capital, which defrauded the Danish tax office out of £1.5bn between 2012 and 2015. The UK’s National Crime Agency (NCA) raided the offices of Solo Capital in 2016. The hedge fund has closed down.

The NCA’s director of investigations, Nikki Holland, said: “The NCA conducted an initial investigation into an alleged fraud to the value of over £1 bn committed against the Danish and Belgian tax authorities between 2012 and 2015.

“It was agreed, with the support of the Crown Prosecution Service, that investigative challenges would prevent the NCA being able to present evidence which would have a realistic possibility of leading to a prosecution in the UK. This case was transferred to the Danish authorities in October 2019, and we continue to provide support as required.”

• This article was amended on 6 February 2020 because an earlier version referred to Shah’s mansion being seized, as the English translation of the Danish State Prosecutor’s Office notice said. The State Prosecutor’s office has since confirmed to Shah’s lawyers that the property has been “frozen, not confiscated”.