France court orders IMF’s Lagarde to stand trial in Tapie payout case

France’s highest appeals court ruled Friday that International Monetary Fund (IMF) chief Christine Lagarde must stand trial for her role in a 400 million euro ($440 million) state payout to businessman Bernard Tapie in 2008, when she was serving as French finance minister.

The court rejected Lagarde’s appeal against a judge’s order in December for her to stand trial at the Cour de Justice de la Republique, a court that tries ministers for crimes in office.

Her lawyer expressed regret over the decision and said he is convinced that the trial will show she is innocent.

IMF spokesman Gerry Rice said that its executive board had been briefed on the matter and continued to have confidence in Lagarde’s capacity to carry out her duties.

Lagarde is accused of negligence for improperly signing off on a decision to allow an extremely rare out-of-court arbitration in a dispute between Tapie and the state.

Arbitration judges later ruled in Tapie’s favor and ordered the state payout to him, but appeals courts have since thrown out that settlement decision. A Paris appeals court has ordered Tapie to reimburse the state, but the businessman has lodged an appeal, which is still pending.

The case relates to Tapie suing the state for compensation after he claimed the bank Credit Lyonnais defrauded him in a 1993 sale of his stake in sports company adidas.

Despite the case looming over her, Lagarde was appointed in January for a second 5-year term as managing director of the IMF. Lagarde has had a high-flying career, first as a top corporate lawyer in the US, then as a cabinet minister and most recently as managing director at the IMF.

While with the IMF, she has won praise for persuading the US Congress to approve a landmark reform program that shifted more voting power to China and other key emerging market countries and has generally been considered a skillful negotiator.