photo of Christine Lagarde, the head of the International Monetary Fund (IMF
A French court has ordered International Monetary Fund (IMF) chief Christine Lagarde to face trial over her role in the payment of some €400 million ($434 million) to French tycoon Bernard Tapie, legal sources said Thursday.
A statement from Lagarde said that she plans to fight the trial order.
France’s main prosecutor recommended in September that magistrates drop their investigation into Lagarde.
The case revolves around a controversial €400 million state payout ordered by an arbitration panel in 2008 for Bernard Tapie, a former politician and businessman, over his sale of sportswear company Adidas. The arbitration panel upheld Tapie's claim that the Crédit Lyonnais bank had defrauded him by intentionally undervaluing Adidas at the time of the sale and that the state – as the bank's principal shareholder – should compensate him.
It was Lagarde who, in her role as French finance minister at the time, ordered the case to be heard by an arbitration panel instead of proceeding through the regular courts.
Critics argue that the state should not have paid compensation to a convicted criminal who was bankrupt at the time and would not have been able to pursue the case in court. Tapie spent six months in prison in 1997 for match-fixing during his time as president of popular French football club, Olympique Marseille.
Critics also say that Lagarde ensured Tapie received preferential treatment by referring the matter to arbitration due to his financial support for former French president Nicolas Sarkozy – Lagarde’s boss at the time – in his 2007 presidential bid.
Lagarde has always protested her innocence, denying any wrong doing in the arbitration process, which she says was independent and in the best interests of taxpayers.
Tapie was placed under formal investigation for committing fraud in late June of 2013. He was ordered to pay back the money starting this month.
The 'Tapie affair' has entangled several other high-profile figures, including Sarkozy’s ex-chief of staff Claude Guéant, and Stéphane Richard, Lagarde’s former chief of staff at the finance ministry and now chief executive of Orange.
Lagarde was appointed Managing Director of the IMF in July 2011. Lagarde served as French finance minister from June 2007, and also served as minister for foreign trade for two years. Before entering politics, Lagarde worked as an anti-trust and labour lawyer, serving as a partner with the international law firm of Baker & McKenzie.
Lagarde’s predecessor at the IMF, French socialist politician Dominique Strauss-Kahn, was forced to resign in 2011 following accusations he sexually assaulted a hotel maid in New York.
SOURCE: FRANCE 24 with AFP, REUTERS