International Monetary Fund chief Christine Lagarde must stand trial in France over a ruling in 2008 that handed around $440 million of public funds to a politically-connected business magnate, France’s top court said Friday.
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Ms. Lagarde is charged with negligence for her role in settling a long-running legal dispute known as “L’Affaire Tapie” between French entrepreneur and former politician Bernard Tapie and the state.
Lagarde, the IMF’s managing director, was finance minister at the time. Following this decision, Lagarde is expected to stand trial [Bloomberg report] before the Cour de Justice [official website, in French], which specializes in trying government officials accused of crimes related to their government positions. In a separate case, Tapie has been ordered to reimburse the state for the payout, but an appeal is still pending.
The trial will be only be the fifth in the history of the tribunal, which is made up of three judges and six lawmakers from both the lower and upper houses of parliament. The businessman contended that Credit Lyonnais, a defunct state-owned bank, had given him bad advice when he sold his stake in Adidas, a sportswear company, in 1993.
The appeals court in its ruling Friday did not weigh in on the merits of the case, saying only that the magistrates had “justified” their decision to send it to trial. With Lagarde’s approval, a private arbitration panel ruled that he should get 400 million euros in compensation, including interest.
“Our first and immediate recommendation is for this uncertainty surrounding the terms of Brexit to be removed as quickly as possible so that we know the terms of trade and the ways in which the United Kingdom will continue to operate in the global economy”, Lagarde said at a news conference.
At the Fund, she has won praise for persuading the U.S. Congress to approve a landmark reform program that shifted more voting power to China and other key emerging market countries and has generally been considered a skilful negotiator.
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Lagarde has maintained that she acted in France’s best interests during the case. In the past, she called the accusations “completely groundless”.
