IMF’s Lagarde guilty of negligence but spared jail
Stain on career of one of world’s most powerful women
PARIS // The International Monetary Fund’s managing director was convicted yesterday of negligence over a huge state payout to a tycoon when she was French finance minister. But Christine Lagarde was spared jail time and a criminal record. She had risked a year of imprisonment and a fine.
The ruling was a rare setback in Ms Lagarde’s glittering career but it was not clear how it would affect her position at the IMF, whose board was to meet in Washington to discuss the court’s decision. Even without punishment, the guilty verdict tarnishes Ms Lagarde’s impressive career as one of the most powerful women in world finance.
The case involves a €403 million (Dh1.55bn) arbitration deal given to tycoon Bernard Tapie in 2008 over the botched sale of sportswear maker Adidas in the 1990s. The amount prompted indignation in France. Civil courts have since quashed the award, declared the arbitration process and deal fraudulent and ordered Mr Tapie to pay the money back.
In deciding not to sentence Ms Lagarde, the French court noted that the award to Mr Tapie had been annulled, sparing damage to the public purse. It also noted by way of explaining the lack of a sentence that Ms Lagarde was caught up at the time in the storm of financial crisis that engulfed the global economy.
The court also said that Ms Lagarde’s “personality and national and international reputation” counted in her favour.
The Court of Justice of the Republic tries cases concerning ministers for alleged crimes while in office. Ms Lagarde was not present for the verdict and maintained her innocence through the week-long trial. The prosecutor had asked for an acquittal in the case, which began in 2011.