Christine Lagarde, chief of the International Monetary Fund, was put under formal investigation for ‘negligence’ in the case involving a state payout to a French businessman in 2008 when she was finance minister in the cabinet of former President Nicolas Sarkozy.
Lagarde confirmed the charges against her to news agency AFP on Wednesday. The graft case involves French businessman Bernard Tapie who had claimed he was cheated by the majority state-owned Credit Lyonnais bank in the sale of sportswear firm Adidas in the early 1990s.
Lagarde had referred the case to a three-member arbitration panel that had ruled in Tapie’s favour. Investigators suspect Tapie was given favourable treatment in return for his support to Sarkozy’s 2007 presidential campaign. Lagarde is accused of approving the payout but denies it. Five other people have been put under formal investigation including Bernard Tapie himself and Stephane Richard, who was Lagarde’s former chief of staff and is currently the chief of telecom giant Orange. Lagarde says she will not resign from her IMF post. She had taken over as director of the IMF in 2011 after Dominique Strauss Kahn was accused of sexually assaulting a hotel maid in New York.
IMF communications director, Gerry Rice told HT “Lagarde has already made a statement on this matter. She is now on her way back to Washington and will, of course, brief the Board as soon as possible.” Under French law, negligence is punishable by a year of prison and 15,000 euros fine but a formal investigation doesn’t always lead to trial.