Christine Lagarde’s past is catching up with her, threatening to derail her march to a second term as head of the International Monetary Fund (IMF).
Lagarde, 59, is facing trial for negligence in relation to a settlement France reached with businessman Bernard Tapie during her time as the nation’s finance minister, Bloomberg reports, citing a French court.
The case will proceed even after prosecutors recommended dropping the case.
Lagarde has repeatedly denied wrongdoing and her lawyer said she will appeal the decision to put her on trial.
Previously, Lagarde was seen as all but a lock to be reappointed when her term ends next July.
At the fund’s annual meeting in Lima in October, Lagarde said she would be open to serving another term.
While she is still the frontrunner and analysts said the case is unlikely to derail her reappointment, the prospect of a politically charged trial in her home country could complicate her future at the Washington-based IMF.
The fund’s 188 member countries will be keen to avoid adding to the negative publicity generated by the legal troubles of former IMF heads Dominique Strauss-Kahn and Rodrigo Rato, said Andrea Montanino, who served as an executive director at the fund until last year.
“If the trial goes ahead, it could be difficult to seek a second mandate,” said Montanino, now director of the global business and economics program at the Atlantic Council in Washington.
Lagarde took over as head of the IMF in 2011 when Strauss-Kahn resigned after a hotel maid accused him of sexual assault. Prosecutors dropped a criminal case amid inconsistencies in her testimony.
Strauss-Kahn reached an undisclosed civil settlement with the woman.
He was acquitted in June of charges of aggravated pimping stemming from sex parties he attended five years ago.
Rato is being investigated for money laundering after he took advantage of a 2012 tax amnesty to repatriate previously undeclared offshore funds, an accusation he has denied.
A trial would focus on Lagarde’s 2008 decision to allow an arbitration process to end a dispute between Tapie, a supporter of then-French President Nicolas Sarkozy, and former state-owned bank Credit Lyonnais.
Lagarde is the first woman to lead the IMF, which was conceived during World War II to coordinate international monetary policy and has evolved into a lender of last resort for countries facing capital shortfalls.
The managing director is selected by the executive directors, who answer to the fund’s member nations.
– Contact us at [email protected]