IMF chief Christine Lagarde is being investigated in a French fraud case

The former French finance minister won't necessarily end up in the dock, but it doesn't look good.

by Rachel Savage
Last Updated: 27 Aug 2014

If you’re IMF boss Christine Lagarde and you’re busy trying to assess the state of the global economy and bail out countries which haven’t got a grip on their finances, the last thing you need is to be put under formal investigation in a fraud case.

Lagarde is being probed for alleged ‘negligence’ over a €403m (£321m) payment to tycoon Bernard Tapie in 2008, when she was finance minister under then-President Nicholas Sarkozy, according to anonymous sources cited by Reuters and confirmed by her spokesman to the FT.

The award, decided by a three-person arbitration panel Lagarde referred the case to, was compensation in Tapie’s dispute with Credit Lyonnais, a now-defunct state-owned bank, over a 1993 share sale.

Turnaround specialist Tapie, who owned Adidas back in the 90s, supported Sarkozy in the 2007 presidential election and investigators suspect the payout was granted in return, according to the BBC.

The former finance minister, who has already been questioned by magistrates as a witness in the long-running case, is appealing the decision and is refusing to resign from the IMF. She is under suspicion of 'simple negligence', according to her spokesman, a charge that carries a maximum penalty of one year in prison and a €15,000 fine.

Being investigated indicates the court believes their is evidence of a crime, but doesn’t necessarily mean Lagarde will be charged and end up in the dock.

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