Lagarde to appeal against court decision to charge her

The French court has ordered Ms Lagarde to face trial over her role in a payout of some €400 million (S$616 million) to businessman Bernard Tapie.
The French court has ordered Ms Lagarde to face trial over her role in a payout of some €400 million (S$616 million) to businessman Bernard Tapie.PHOTO: AGENCE FRANCE-PRESSE

Charges date back to arbitration case in 2007 when IMF chief was finance minister

PARIS • IMF chief Christine Lagarde will appeal a special court's decision to charge her with negligence over a €404 million (S$620 million) payment to a flamboyant French tycoon.

The order by the French Court of Justice could mean that the managing director of the International Monetary Fund will be embroiled in a potentially lengthy process to address accusations that she acted negligently while overseeing a politically charged 2007 arbitration case, when the state awarded a payout to Mr Bernard Tapie.

Ms Lagarde's French counsel, Mr Yves Repiquet, said in a statement on Thursday that Ms Lagarde, 59, had "always acted in this affair in the interest of the state and in respect of the law". The statement said she believed that "no charge can be attributed" to her.

"The prosecutor said there was no case against Lagarde but the judge has disregarded this," Mr Repiquet said. "This decision was taken in disregard of the facts, of the documents of the trial record and of the recommendations of the prosecution authority. It is therefore incomprehensible."

The court is convened only to try ministers and sub-ministers for wrongdoing involving their jobs.

Ms Lagarde, has repeatedly defended her role in the case, a long-running, legal soap opera that has lasted more than 20 years and exposed ties between Mr Tapie and high-profile French political figures, including former president Nicolas Sarkozy, who was in office when the case went forward.

The IMF did not comment on whether Ms Lagarde, who is the first woman to lead it, would be required to recuse herself from her post during the trial. But its board was aware of her legal entanglement when she was appointed in June 2011 to take the helm from Mr Dominique Strauss-Kahn, another former French finance minister, who was forced to resign his post at the IMF amid a sex scandal.

"This is a big deal," said Mr Christopher Mesnooh, a partner at the legal firm of Field Fisher Waterhouse in Paris. "She's one of the world's most influential women. The real problem is that this is going to dredge up a never-ending political and economic saga."

Ms Lagarde, who was the French finance minister under Mr Sarkozy, ordered that a dispute between Mr Tapie, a long-time friend of Mr Sarkozy's, and Credit Lyonnais bank be referred to an arbitration panel. The panel awarded Mr Tapie the settlement.

Mr Tapie, a former head of the Adidas sports empire, had accused Credit Lyonnais in 1993 of bilking him of vast sums when it oversaw the sale of his stake in Adidas.

The scandal-ridden bank was effectively put into state hands, and when Mr Strauss-Kahn was finance minister in 1999, he ruled that the state was responsible for dealing with Mr Tapie's claim.

The charge of "negligence by a governmental official" is punishable by one year in prison and a fine of €15,000.


A version of this article appeared in the print edition of The Straits Times on December 19, 2015, with the headline 'Lagarde to appeal against court decision to charge her'. Print Edition | Subscribe