IMF’s Lagarde in court for arbitration battle

The arbitration payment was made to a supporter of France's former president Nicolas Sarkozy.

Lagarde risks being placed under formal investigation at the hearing for her 2007 decision as Sarkozy's finance minister to use arbitration to settle a long-running court battle between the state and high-profile businessperson Bernard Tapie.

Under French law, that step would mean there exists "serious or consistent evidence" pointing to probable implication of a suspect in a crime.

It is one step closer to trial but a number of such investigations have been dropped without any trial.

Such a move could prove uncomfortable for the International Monetary Fund, whose former head, Frenchman Dominique Strauss-Kahn, quit in 2011 over a sex assault scandal, and for a woman voted the most influential in France by Slate magazine.


"It's a pleasure to see you," a smiling Lagarde said to reporters as arrived at the Paris court for a hearing that could last into Friday.

Misuse of funds
She is not accused of financially profiting herself from the payout and has denied doing anything wrong by opting for an arbitration process that enriched Tapie.

With interest, the award amounted to  €403-million.

However a court specialising in cases involving ministers is targeting her for complicity in the misuse of funds because she overruled advisers to seek the settlement.

Sources close to the IMF board have said they are not worried by the affair and are confident Lagarde herself did not profit from it.

But they added the board might review its position if judicial procedures took her away from her duties.

Tapie, a one-time Socialist minister who later became a supporter of the conservative Sarkozy, said the bank defrauded him after it later resold his stake for a much higher sum.

Credit Lyonnais, now part of Credit Agricole, has denied any wrongdoing.

Current Finance Minister Pierre Moscovici told Le Monde newspaper Lagarde retained the support of France's government, but said that it would appeal against the arbitration award if she was placed under formal investigation. – Reuters

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Reuters
Guest Author

Related stories

Advertising

Subscribers only

Ithala fails to act against board chairperson over PPE scandal

Morar asked to settle with the state and pay back the profit he made on an irregular tender

Vodacom swindled out of more than R24m worth of iPhones

A former employee allegedly ran an intricate scam to steal 8700 phones from the cellular giant

More top stories

Judicial Conduct Committee orders Mogoeng to apologise for his remarks...

The JCC said that by the chief justice straying into politics, he breached the judicial conduct code and ordered him to issue an apology and retraction

Will job creation schemes fix the unemployment crisis?

Experts say there is no evidence yet to show that government-funded employment schemes work long term

Will Cyril Ramaphosa have one or two terms?

The threat to the president’s rule comes not from the opposition, but from within the ANC

New VC wants Wits to produce innovators

Zeblon Vilakazi’s big dream is that Africa cannot simply be a spectator in the age of technological innovation; it must lead, and to lead it must act
Advertising

press releases

Loading latest Press Releases…