Lagarde in negligence trial
Court rules IMF chief must explain role in €400m award to tycoon
THE International Monetary Fund chief Christine Lagarde must stand trial in France over a 2008 arbitration ruling that handed €400 million (£336m) to a politically connected business magnate, France’s top court has ruled.
Ms Lagarde, who was French finance minister at the time of the deal which went in favour of controversial tycoon Bernard Tapie, is accused of negligence in her handling of the case. She has denied any wrongdoing. A special court ruled in December that Ms Lagarde should stand trial, but she appealed. France’s Court of Cassation has rejected the appeal.
Ms Lagarde’s lawyers did not immediately respond to the decision.
Ms Lagarde, who was in China yesterday at a G20 summit, has said she had acted “in the best interest of the French state and in full compliance with the law”.
The unusually generous 2008 arbitration deal, paid from public funds, prompted years of legal disputes that remain unresolved.
The investigation began in 2011, just before Ms Lagarde was named new head of the IMF in the wake of sexual assault allegations against her predecessor, the French economist Dominique Strauss-Kahn. The executive board of the IMF has expressed its confidence in Ms Lagarde despite the investigation.
The decision last year to send her to trial came as a surprise because a prosecutor had earlier argued that the case against her should be dropped.
Negligence by a person invested with public authority carries a risk of up to a year in prison and a €15,000 (£12,600) fine.
She will be tried at the Court of Justice of the Republic, a special body that tries government ministers for alleged wrongdoing while in office.
A date has not been set for the trial.
The case is part of a larger legal saga centering on Mr Tapie, a flamboyant magnate and TV star who had sued French bank Credit Lyonnais for its handling of the sale of his majority stake in sportswear company Adidas in the mid 1990s.
With Ms Lagarde’s approval, a private arbitration panel ruled that he should get €400m (£336m) in compensation, including interest.
The deal was seen by critics as a sign of a too-close relationship between business magnates and the French political elite.
Mr Tapie was close to thenpresident Nicolas Sarkozy, Ms Lagarde’s boss.