International Monetary Fund chief Christine Lagarde must stand trial for her role in a €400 million payout case while she was French finance minister back in 2008, France’s highest appeals court has ruled.
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The IMF chief is being accused of negligence relating to a €400m (£342m) payment to Bernard Tapie in 2008, to settle a long-running court battle between the businessman and the state.
As finance minister, Ms. Lagarde chose to refer the dispute to an arbitration panel in 2007 that ultimately awarded Mr. Tapie more than €400 million ($441 million) in compensation.
Lagarde has maintained that she acted in France’s best interests during the case. Following the latest ruling, IMF’s executive board reiterated its full confidence in Lagarde’s ability to carry out her duties.
Her lawyer, Patrick Maisonneuve said he regretted the decision, but felt assured that the trial will prove Lagarde was innocent.
In 2007, then-Finance Minister Lagarde intervened in the process and appointed a special committee to resolve the issue.
The arbitration judges later ruled in Tapie’s favour and ordered the state payout to him, but appeals courts have since thrown out the settlement decision.
A court has since found the arbitration to be fraudulent because one of the arbitrators had links to 73-year-old Tapie. He had resigned his post two months earlier to fight sexual assault allegations.
Interestingly, the complicated case involves the sale of Tapie’s stake in sports company Adidas to French state owned bank Credit Lyonnais.
She has denied any wrongdoing.
Negligence by a person invested with public authority carries a risk of up to a year in prison and a 15,000 euro (£12,600) fine.
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Aug 4, 2011: French court orders investigation into Lagarde’s role in Tapie case.
