Je ne regrette rien.
Photo by Jim Watson/AFP/Getty Images

Court unhappy at €400 million payment to businessman and former Socialist who switched sides to back Sarkozy's election bid.

By Geoffrey Smith
August 27, 2014

International Monetary Fund managing director Christine Lagarde has been placed under formal investigation by a French court for her role in dating back to 2008.

Lagarde, who took over from fellow-Frenchman Dominique Strauss-Kahn at the IMF after the latter was embroiled in allegations of sexually assaulting a hotel maid, is suspected by the court of “negligence” while serving as Finance Minister under former President Nicolas Sarkozy.

Specifically, the court’s concerns refer to the €400 million payment that she approved to businessman Bernard Tapie to settle a long-running litigation against Crédit Lyonnais, a state-owned bank that collapsed in the early 1990s after a reckless lending spree.

The settlement, in 2008, followed less than a year after Tapie, a former Socialist minister, gave high-profile support to the center-right campaign of Sarkozy in the 2007 presidential elections.

Lagarde denies any suggestion of having acted improperly.

“I have instructed my lawyer to appeal this decision which I consider totally without merit,” AFP quoted her as saying.

In the French judicial system, being placed under formal investigation reflects the court’s belief that a crime has been committed. The Financial Times cited Lagarde’s spokesman as saying that the maximum penalty for the crime in question would be a year in prison. But merely placing someone under investigation doesn’t automatically mean they will be charged.


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