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French court orders probe into IMF’s Lagarde

French court orders probe into IMF’s Lagarde
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First Published: Thu, Aug 04 2011. 06 41 PM IST
Updated: Thu, Aug 04 2011. 06 41 PM IST
Paris: A French court ordered an investigation on Thursday into the role of IMF head Christine Lagarde in a huge settlement paid to a businessman friend of President Nicolas Sarkozy when she was finance minister.
A lawyer for Lagarde, who took up her post as International Monetary Fund managing director last month, said the opening of an investigation would be “in no way incompatible” with her functions at the global lender.
Lagarde has denied any misconduct in her approval of a €285 million ($407 million) arbitration payout to Bernard Tapie in 2008 to end a long-running legal dispute with a former state-owned bank, but the decision to investigate her role in the affair could cast a pall over her IMF debut.
“We have come out in favour of an investigation concerning Madame Lagarde,” court official Gerard Palisse said after the Court of Justice of the Republic, a special tribunal that can judge ministers, met to examine the results of a preliminary probe by judges.
Yves Repiquet, a lawyer for Lagarde, told France’s BFM TV that Lagarde had received the news calmly and even with relief, following months of speculation over whether a complaint brought by opposition Socialists over the case would end up in a probe.
“This procedure is in no way incompatible with the current functions of the managing director of the IMF,” Repiquet said in a statement emailed directly after the court’s announcement.
Lagarde, who was a high-flying corporate lawyer before joining the French government, is tasked with turning the page at the IMF after her predecessor Dominique Strauss-Kahn quit after being charged with trying to rape a New York hotel maid.
She could now be called for questioning by the investigating judges in a process that could run on for months or even years.
“An investigation could take a very long time, one could expect it to take several years as there would be a lot of witnesses to interview, among them Madame Lagarde, who could also be investigated as a suspect,” Virginie Duval, general secretary of France’s USM magistrates union, told Reuters television.
The prosecutor who pushed for the probe accuses Lagarde of abuse of authority when she overruled objections from advisors to settle the case with Tapie, who claimed Credit Lyonnais bank defrauded him in the 1993 sale of his stake in sports clothing group Adidas.
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First Published: Thu, Aug 04 2011. 06 41 PM IST