IMF chief investigated in graft case

Updated: 2014-08-28 07:02

By Agence France-Presse in Paris(China Daily)

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IMF chief investigated in graft case

International Monetary Fund (IMF) Managing Director Christine Lagarde holds a news conference in Washington in this April 10, 2014 file picture. [Photo/Agencies] 

Lagarde questioned by French court over $527m state payout

IMF chief Christine Lagarde, one of the world's most powerful women, announced on Wednesday that she had been accused of "negligence" in a multimillion-euro graft case relating to her time as French finance minister.

The shocking announcement came a day after Lagarde was grilled by a special court in Paris that probes cases of ministerial misconduct. It was the fourth time she has faced such questioning in a case that has weighed upon her powerful position as managing director of the International Monetary Fund.

"The investigating commission of the court of justice of the French Republic has decided to place me under formal investigation," she told AFP.

"After three years of proceedings and dozens of hours of questioning, the court found from the evidence that I committed no offense, and the only allegation is that I was not sufficiently vigilant," she said, according to a report by The Associated Press on Wednesday.

In France, being placed under formal investigation is close to being formally charged. It happens when an examining magistrate decides there is a case to be answered. Investigation does not, however, always lead to a trial.

"I have instructed my lawyer to appeal this decision, which I consider totally without merit," Lagarde said, adding that she would return to Washington and brief the IMF board.

Asked whether she intended to resign from the IMF, she responded simply, "No."

The case relates to her handling of a 400-million-euro ($527 million) state payout to disgraced French tycoon Bernard Tapie in 2008.

The payout was connected to a dispute between the businessman and the partly state-owned bank Credit Lyonnais over his 1993 sale of the Adidas sportswear group.

Tapie claimed that Credit Lyonnais 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.

Lagarde referred the dispute to a three-member arbitration panel that ruled in favor of Tapie, who is suspected of receiving favorable treatment in return for supporting Nicolas Sarkozy in the 2007 election.

"After three years of procedure the only surviving allegation is that through inattention I may have failed to block the arbitration that put an end to the long-standing Tapie litigation," she told AFP.

Lagarde has always denied wrongdoing. After a third grilling in March, she had said she "always acted in the interest of the country and in accordance with the law".

She had until now avoided formal charges, which could force her to quit as head of the IMF. She has instead been given special-witness status, which forces her to come back for questioning when asked by the court.

Five people have been charged in the case, including Stephane Richard, then Lagarde's chief of staff, who is now the head of telecom giant Orange.

(China Daily 08/28/2014 page12)