IMF chief La­garde on trial in France over ty­coon case

Kuwait Times - - BUSINESS -

IMF chief Chris­tine La­garde went on trial in France yes­ter­day over a mas­sive state pay­out to a flam­boy­ant ty­coon when she was fi­nance min­is­ter, in a case that risks tar­nish­ing her stel­lar ca­reer. La­garde de­nies the charges of neg­li­gence, ar­gu­ing she was act­ing “in the state’s in­ter­est” in ap­prov­ing the pay­ment to Bernard Tapie, the for­mer owner of sports­wear gi­ant Adi­das.

If found guilty, the 60-year-old could re­ceive a max­i­mum one-year prison sen­tence and a 15,000 euro ($15,900) fine. She ar­rived at the Court of Jus­tice of the Repub­lic, a tri­bunal that hears cases against min­is­ters, wear­ing a dark suit and a pat­terned scarf. Her de­fense team is ex­pected to push for an ad­journ­ment.

“I don’t plan to keep quiet,” La­garde told the pre­sid­ing judge, when ad­vised of her right to re­main silent. In a doc­u­men­tary aired on French tele­vi­sion on Sun­day, La­garde said she was “con­fi­dent and de­ter­mined.” “I tried to do my work the best I could within the lim­its of what I knew,” she told France 2. “Neg­li­gence is an un­in­ten­tional of­fence. I think all of us have been a lit­tle bit neg­li­gent at some stage of our lives,” she added.

What­ever the out­come, the case risks dam­ag­ing the im­age of the for­mer cor­po­rate lawyer who pro­gressed through the fi­nance min­istry to be­come one of the world’s most pow­er­ful women. It also threat­ens the cred­i­bil­ity of the In­ter­na­tional Mone­tary Fund, as La­garde is the third IMF chief to face trial. The IMF has given its full back­ing to its man­ag­ing di­rec­tor, who be­gan her sec­ond term in the post in July.

La­garde’s lawyer Pa­trick Maison­neuve yes­ter­day dis­missed spec­u­la­tion about what the IMF would do if she lost the case. “She will be cleared so the ques­tion hasn’t even arisen,” he told Europe 1 ra­dio.

The ac­cu­sa­tions stem from La­garde’s han­dling of a dis­pute with Tapie, a for­mer gov­ern­ment min­is­ter who claimed a state bank had de­frauded him in its sale of Adi­das. Tapie, now 73, owned the firm be­tween 1990 and 1993 but lost con­trol of it when he went bank­rupt.

He sold it to state-owned bank Credit Ly­on­nais for 315.5 mil­lion eu­ros in Fe­bru­ary 1993. The bank sold it again the year af­ter at 701 mil­lion eu­ros, lead­ing Tapie to claim he had been cheated. La­garde, upon be­com­ing fi­nance min­is­ter in 2007 un­der then pres­i­dent Ni­co­las Sarkozy, or­dered that Tapie’s long-run­ning bat­tle with the state be re­solved by ar­bi­tra­tion. The de­ci­sion was hugely costly, with Tapie ini­tially walk­ing away with a stag­ger­ing 404 mil­lion eu­ros in com­pen­sa­tion in 2008. Af­ter a lengthy court bat­tle, he was or­dered to re­pay the money.

In­ves­ti­ga­tors sus­pect the ar­bi­tra­tion process was rigged in favour of Tapie, who had sup­ported Sarkozy in his 2007 elec­tion cam­paign. One of the ar­bi­tra­tors also had links to the busi­ness­man.

La­garde, who served as fi­nance min­is­ter un­til 2011, has al­ways in­sisted she acted in France’s best in­ter­est. Al­though she is not ac­cused of per­son­ally prof­it­ing from the pay­ment, she has been crit­i­cised for fail­ing to chal­lenge the award.

The pros­e­cu­tion says that through her ac­tions, La­garde “de­prived the state of a chance to avoid this money be­ing mis­used”. — AFP

PARIS: In­ter­na­tional Mone­tary Fund chief Chris­tine La­garde con­fers with her lawyers, Pa­trick Maison­neuve (left) and Bernard Grelon (2nd left) prior to her trial at the spe­cial Paris court, France yes­ter­day. — AP

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