IMF boss under formal investigation
Print Edition
CHRISTINE Lagarde, head of the International Monetary Fund, has been put under formal investigation by French magistrates for negligence in a political fraud affair dating from 2008, when she was finance minister.
Lagarde, who this week was questioned by magistrates in Paris for a fourth time under her existing status as a witness in the long-running saga, said she will contest the decision.
“I have asked my lawyer to use all recourse against this decision which I consider to be completely unfounded,” she said on BFMTV.
“I am returning to work in Washington this afternoon.”
Under French law, magistrates place someone under formal investigation when they believe there are indications of wrongdoing, but that does not always lead to a trial.
Lagarde’s attorney, Yves Repiquet, said he will appeal the magistrates’ decision and so the matter will not prevent Lagarde from doing her job as the head of the IMF in the meantime.
“She is now on her way back to Washington and will, of course, brief the (IMF) board as soon as possible,” said IMF spokesman Gerry Rice.
“Until then, we have no further comment,” he said.
The inquiry relates to allegations that tycoon Bernard Tapie, a supporter of conservative ex-president Nicolas Sarkozy, was improperly awarded 403 million euros (US$531 million) in an arbitration to settle a dispute with the now defunct, state-owned bank Credit Lyonnais.
The inquiry has already embroiled several of Sarkozy’s cabinet members and France Telecom’s chief executive Stephane Richard, who was an aide to Lagarde when she was Sarkozy’s finance minister.
In previous rounds of questioning, Lagarde has not recognized as her own the preprinted signature to sign off on a document facilitating the payment, Repiquet said.
However Richard has stated that Lagarde was fully briefed on the matter.
The offense of negligence by a person charged with public responsibility in France carries a maximum penalty of one year’s imprisonment and a 15,000-euro fine.
Lagarde was a star in Sarkozy’s cabinet and well-respected by peers, pushing through many of the high-profile initiatives in France’s presidency of the G20 group of nations.
She has been managing director of the IMF since 2011, after her predecessor, Frenchman Dominique Strauss-Kahn, resigned over sexual assault charges that were later dropped.
A spokesman said last year that the global lender’s board had discussed possible consequences of the Tapie case and determined that she will still be able to lead the fund.
Tapie, a colorful and often controversial character in the French business and sports world, sued the state for compensation after selling his stake in sports company Adidas to Credit Lyonnais in 1993.
He claimed the bank had defrauded him after it later resold his stake for a much higher sum. Credit Lyonnais, now part of Credit Agricole, has denied any wrongdoing.
Investigators are trying to determine whether Tapie’s political connections played a role in the government’s decision to resort to arbitration that awarded him a massive pay-out. He has denied any wrongdoing.
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