Date
17 August 2017
International Monetary Fund chief Christine Lagarde denies any wrongdoing, and says she has no intention of resigning.  Photo: Bloomberg
International Monetary Fund chief Christine Lagarde denies any wrongdoing, and says she has no intention of resigning. Photo: Bloomberg

IMF’s Lagarde probed over negligence

A French court has placed Christine Lagarde, the head of the International Monetary Fund (IMF), under formal investigation for negligence in a corruption case dating back to her days as finance minister under then president Nicolas Sarkozy, BBC News reported.

Lagarde, 58, is being questioned about her role in awarding 400 million euros (US$527 million) in compensation to businessman Bernard Tapie in 2008. Tapie supported Sarkozy in the 2007 presidential election.

She denies any wrongdoing. She also told Agence France-Presse she has no intention of resigning from the IMF.

Tapie was once a majority shareholder in sports goods company Adidas but sold it in 1993 in order to become a cabinet minister in Francois Mitterrand’s Socialist government, according to the BBC.

The businessman later sued Credit Lyonnais over its handling of the sale, alleging that the partly state-owned bank had defrauded him by deliberately undervaluing the company.

His case was later referred by Lagarde to a three-member arbitration panel which awarded the compensation.

Investigators suspect he was granted a deal in return for supporting Sarkozy.

Lagarde said last year that her decision to refer Tapie’s dispute with Credit Lyonnais to a panel of judges was “the best solution at the time”.

Although being placed under formal investigation does not necessarily lead to charges, the development could raise questions about the rest of her term at the IMF, which is due to end in 2016, the report said.

The charge carries a maximum penalty of 15,000 euros and a prison term of one year, the Wall Street Journal said.

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CG

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