Mr Tapie has been ordered to pay back the entire 400m euros, but has appealed.
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Lagarde has maintained that she acted within the confines of the law and in the interests of the state.
If convicted, she risks up to a year in prison and a fine of 15,000 euros.
I’m not sure when the trial is but Madame Lagarde is sure to get hot under the collar when it comes around, assuming she doesn’t go on the lam.
A court has since found the arbitration to be fraudulent because one of the arbitrators had links to 73-year-old Tapie, a controversial figure who served as cities minister in the 1990s and has also dabbled in acting.
Lagarde made her remarks when she met the press together with Chinese Premier Li Keqiang and other five chiefs of worldwide financial institutions after a round-table meeting at Diaoyutai State Guesthouse in Beijing. Tapie had sued the bank, alleging it had undervalued his majority stake in Adidas when he sold it in 1993 to become a Cabinet minister under Francois Mitterand, the Socialist president.
Lagarde told the media later that International Monetary Fund had increased the growth forecast for China in 2016 by 0.1 percentage point to 6.6 per cent from 6.5 per cent.
The IMF boss was put under formal investigation by the French courts in August 2014.
The IMF would not comment directly on the appeals court ruling but said it stands behind Lagarde, who recently began her second term as managing director.
In December, the judicial commission of France’s Cour de Justice de la Ré publique-a court that decides on alleged wrongdoings by government ministers while in office-ordered Ms. Lagarde to stand trial for alleged negligence over the decision she made as finance minister. In an interview in Washington earlier this month, she insisted she had a “clear conscience”.
In its ruling, France’s Court of Cassation underlined that she had no personal relationship with anyone involved in the case, and had not influenced the appointment of the arbitrators.
Her lawyer Patrick Maisonneuve said he was “convinced” that she would be “absolved of all responsibility”.
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International Monetary Fund managing director Christine Lagarde yesterday called for quick action to end uncertainty over Britain’s vote to leave the European Union, which she said is dampening global economic growth.
