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France

Judge, lawyer questioned in case linked to IMF’s Lagarde

© AFP

Text by FRANCE 24

Latest update : 2013-05-28

A judge and a lawyer have been detained by French police, judicial sources said Tuesday, as part of a probe into a €400 million state payout to disgraced tycoon Bernard Tapie in 2008, during IMF chief Christine Lagarde’s spell as finance minister.

French police have detained a judge and a lawyer for questioning in connection with a corruption case linked to IMF chief and former French finance minister Christine Lagarde, judicial sources said Tuesday.

Meanwhile, the IMF has moved to reiterate its confidence in Lagarde, despite the ongoing scandal.

The case revolves around a €400 million payout ordered by an arbitration panel in 2008 to Bernard Tapie, a former politician and businessman who spent six months in prison in 1997 for match-fixing during his time as president of France's biggest football club, Olympique Marseille.

Pierre Estoup, who was one of the three judges who presided over the arbitration panel that granted the payment to Tapie, was detained by investigators probing the case on Monday.

Estoup's detention was based on his failure to reveal a former professional relationship with one of Tapie's lawyers in the case, Maurice Lantourne, judicial sources told the AFP news agency.

Lantourne himself was also detained for questioning on Tuesday, the sources said.

Questions raised over €400 million payout

The massive cash settlement awarded to Tapie followed a dispute between the disgraced tycoon and partly state-owned bank Credit Lyonnais over his 1993 sale of sports group Adidas.

The panel upheld his claim 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.

It was Lagarde who, in her role as French finance minister at the time, ordered the case to be heard by the panel.

Critics have claimed that 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.

Some have suggested that Tapie was given preferential treatment due to his support for former French president Nicolas Sarkozy -Lagarde’s boss at the time - in the 2007 presidential election.

Lagarde avoids criminal charges, for now

The scandal over the payout to Tapie has posed a serious threat to Lagarde’s tenure at the head of the International Monetary Fund, with the possibility of the 57-year-old facing criminal charges.

However, following a two-day grilling by France’s Court of Justice of the Republic last week, Lagarde was granted a reprieve on Friday when French prosecutors decided not to place her under formal investigation over her role in the case.

Instead, Lagarde, who has claimed the use of an arbitration panel was necessary to put an end to a costly dispute and has always denied having acted under orders from Sarkozy, will be an “assisted witness” in the ongoing investigation.

The status of “assisted witness” falls between that of simple witness and being placed under formal investigation. It means Lagarde is likely to continue her work as IMF chief for the time being, but that she could still face further questions - and possibly charges - at a later stage.

(FRANCE 24 with wires)

Date created : 2013-05-28

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