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France

IMF chief Lagarde dodges formal investigation in court

© AFP

Text by FRANCE 24

Latest update : 2013-05-25

IMF chief Christine Lagarde avoided immediate charges on Friday as prosecutors named her an "assisted witness" in an investigation into a state massive payout to a disgraced tycoon.

IMF chief Christine Lagarde dodged disaster on Friday as French prosecutors decided not to place the ex-finance minister under formal investigation over her role in a 285 million euro government payout to a controversial businessman in 2008.

Lagarde will be an “assisted witness” in the ongoing investigation into the massive cash settlement to Bernard Tapie, a disgraced politician and businessman who some suspect was given special treatment because of his links to former French President Nicolas Sarkozy, Lagarde’s boss at the time.

The status of “assisted witness” falls between that of simple witness and being placed under formal investigation –the closest equivalent in French law to being charged with misconduct or a crime. It means she is likely to continue her work as IMF chief unscathed.

'We'll never know how much was saved or lost by resorting to arbitration'

“My explanations answered questions raised about the decisions that I had made at the time,” Lagarde told reporters in Paris after a second marathon day of questioning by prosecutors.

“My status as a supervised witness is not a surprise for me because I always acted in the interest of the state and according to the law.”

It was Lagarde who, as finance minister under Sarkozy, decided to use arbitration to settle a dispute between Tapie and Credit Lyonnais – formerly a partly state-owned bank – over his 1993 sale of sports group Adidas.

Tapie accused Credit Lyonnais of defrauding him by knowingly undervaluing Adidas at the time of the sale and argued that the state, as the principal shareholder in the bank, should pay him compensation.

Tapie’s arguments were upheld by an arbitration panel but critics claimed the state should not have risked being forced to pay compensation to a convicted criminal who, as he was bankrupt at the time, would not have been able to pursue the case through the courts. Tapie served time in prison for match-fixing when he was president of the French football club Olympique de Marseille.

The payment Tapie received enabled him to clear his huge debts and tax liabilities and, according to media reports, left him with between €20 million and €40 million that he has used to relaunch his career.

Lagarde has said the arbitration was necessary to put an end to a costly dispute, and has always denied having acted under orders from Sarkozy.

Date created : 2013-05-24

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