La­garde will re­main as chief de­spite con­vic­tion: IMF board

Kuwait Times - - BUSINESS -

WASH­ING­TON: Chris­tine La­garde will re­main head of the In­ter­na­tional Mone­tary Fund de­spite her con­vic­tion Mon­day of neg­li­gence in a case dat­ing to her ten­ure as France’s fi­nance min­is­ter. The IMF’s ex­ec­u­tive board quickly met af­ter the court’s de­ci­sion and ex­pressed “full con­fi­dence” in La­garde’s abil­ity to carry out her du­ties at the head of the Wash­ing­ton-based in­ter­na­tional lend­ing agency. In a state­ment, the board cited her “out­stand­ing lead­er­ship” and the re­spect and trust she has world­wide.

Af­ter a week­long trial, France’s Court of Jus­tice of the Repub­lic found La­garde guilty of one count of neg­li­gence but spared her jail time and a crim­i­nal record.

The 60-year-old IMF leader had po­ten­tially faced a year of im­pris­on­ment and a fine for not seek­ing to block a fraud­u­lent 2008 ar­bi­tra­tion award to a po­lit­i­cally con­nected ty­coon when she was fi­nance min­is­ter. La­garde thanked the board for the vote of con­fi­dence “in my abil­ity to do my job.” She said she would not ap­peal the French court’s de­ci­sion.

“I am not sat­is­fied with it, but there’s a point in time when one must stop, turn the page and move on,” she said. La­garde, a lawyer, be­came France’s first fe­male fi­nance min­is­ter in 2007, over­see­ing the coun­try’s re­sponse to the fi­nan­cial cri­sis that rocked the global econ­omy from 2008. She is also the first woman to head the IMF.

The trou­bling verdict comes as the IMF is weigh­ing its role in mul­ti­ple global crises, in­clud­ing a bailout for Greece. “She is a strong leader,” US Trea­sury Sec­re­tary Ja­cob Lew said in a state­ment af­ter the board’s de­ci­sion. “And we have ev­ery con­fi­dence in her abil­ity to guide the fund at a crit­i­cal time for the global econ­omy.”

The Court of Jus­tice of the Repub­lic is a spe­cial tri­bunal to hear cases of al­leged crim­i­nal­ity by min­is­ters in of­fice and is made up of three judges and 12 par­lia­men­tar­i­ans. It ruled that La­garde’s neg­li­gence in her man­age­ment of a long-run­ning ar­bi­tra­tion case in­volv­ing ty­coon Bernard Tapie helped open the door for the fraud­u­lent mis­ap­pro­pri­a­tion of pub­lic funds. La­garde her­self was not ac­cused of fraud.

The case re­volves around a 403 mil­lion-euro ($425 mil­lion) ar­bi­tra­tion award given to Tapie in 2008 over the botched sale of sports­wear gi­ant Adi­das in the 1990s.

Civil courts have since quashed the un­usu­ally gen­er­ous award, de­clared the ar­bi­tra­tion process and deal fraud­u­lent and or­dered Tapie to re­fund the money. The spe­cial court’s pre­sid­ing judge, in reading the verdict, said La­garde should have asked her aides and oth­ers for more in­for­ma­tion about the “shock­ing ar­bi­tra­tion award,” which in­cluded a tax-free pay­ment of 45 mil­lion eu­ros in dam­ages to Tapie, which the court de­scribed as fraud­u­lent.

Had La­garde con­tested the award, an ap­peal against it might have suc­ceeded and would have strength­ened the ne­go­ti­at­ing po­si­tion of those who were fight­ing Tapie’s de­mands for com­pen­sa­tion over the sale of his ma­jor­ity stake in Adi­das, the court ruled. In de­cid­ing not to sen­tence La­garde, the court noted that the award to Tapie has since been an­nulled, spar­ing dam­age to the pub­lic purse. It also noted that La­garde was busy at the time with the global eco­nomic cri­sis. La­garde’s “per­son­al­ity and na­tional and in­ter­na­tional rep­u­ta­tion” also counted in her fa­vor in the de­ci­sion not to pun­ish her, the court ruled. — AP

— AP

PARIS: In­ter­na­tional Mone­tary Fund chief Chris­tine La­garde’s lawyer, Pa­trick Maison­neuve, ad­dresses me­dia out­side a spe­cial Paris court.

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