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France

IMF backs Lagarde amid French corruption probe

© AFP | Christine Lagarde speaks during a meeting in Paris in July.

Text by FRANCE 24

Latest update : 2014-08-30

The executive board of the International Monetary Fund expressed confidence on Friday in Managing Director Christine Lagarde after a French court placed her under formal investigation in a corruption scandal.

“The Executive Board has been briefed on recent developments related to this matter, and continues to express its confidence in the managing director’s ability to effectively carry out her duties,” it said in a statement.

Lagarde called the investigation “without basis” after answering questions before magistrates in Paris on Wednesday. She and her former chief of staff are facing questions about their role in an arbitration ruling that handed 400 million euros ($531 million) to French businessman Bernard Tapie.

Tapie had sued French bank Credit Lyonnais for its handling of the sale of his majority stake in sportswear company Adidas in the mid-1990s.

Lagarde was placed under formal investigation earlier this week for alleged “negligence” in the case, which dates back to when she was French finance minister.

In France, being placed under formal investigation is just short of being charged, and occurs when an examining magistrate decides there is a case to be answered.

The judge may eventually decide to remove Lagarde from being under investigation, and she would not face prosecution.

But the action was a serious development for Lagarde, whose previous status was as a special witness in the long-running French probe.

Return to Washington

Lagarde plans to appeal the court decision, which she called “totally without merit”. She said on Wednesday that she had no intention of resigning from her IMF post.

Lagarde said that after three years of proceedings and dozens of hours of questioning, the court had found no evidence that she had done anything wrong and that the only remaining allegation “is that I was not sufficiently vigilant”. She said she was returning to Washington and her work at the IMF.

The IMF’s 24-member executive board is responsible for the day-to-day operations of the fund. It represents the 188 nations that are members of the international lending organisation. The largest economies, such as the United States, have their own board seat, while smaller countries are represented by directors who speak for a group of countries.

Lagarde’s predecessor, French socialist politician Dominique Strauss-Kahn, was forced to resign in 2011 following accusations he sexually assaulted a hotel maid in New York.

(FRANCE 24 with AP, AFP)

Date created : 2014-08-30

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