IMF chief Christine Lagarde, one of the world’s most powerful women, announced yesterday that she had been charged with “negligence” over a multi-million-euro graft case relating to her time as French finance minister.
The shock announcement came a day after she was grilled for more than 15 hours by a special court in Paris that probes ministerial misconduct, the fourth time she has been questioned in a case that has long weighed upon her position as managing director of the International Monetary Fund (IMF).
In France, those found guilty of “negligence” can be sanctioned by a year in prison and a $15,000-euro fine.
“The investigating commission of the court of justice of the French Republic has decided to place me under formal investigation,” she said in exclusive comments to AFP.
In France, being placed under formal investigation is the nearest equivalent to being charged, and happens when an examining magistrate has decided there is a case to be answered.
It does not, however, always lead to a trial.
Asked whether she intended to resign from the IMF, she responded: “No.” But her fate now hangs on the global lender’s board of directors.
“I have instructed my lawyer to appeal this decision, which I consider totally without merit,” said Lagarde, who replaced Dominique Strauss-Kahn as IMF chief in 2011 after he became embroiled in a New York sex scandal involving a hotel maid.
“I return back to Washington where I will indeed brief my board,” she added.
IMF spokesman Gerry Rice said the board would meet Lagarde “as soon as possible”.
“Until then, we have no further comment,” added Rice.
French Government spokesman Stephane Le Foll was similarly tight-lipped, saying Paris “had no comment to make on choices that are down to the IMF and no comment on judicial decisions”.
The case relates to her handling of a 400-million-euro ($528-million) state payout to disgraced French tycoon Bernard Tapie in 2008, which investigating judges suspect may have been doled out in return for his support of ex-president Nicolas Sarkozy in the 2007 election.
The payout to Tapie was connected to a dispute between the businessman and partly state-owned bank Credit Lyonnais over his 1993 sale of sportswear group Adidas.
Tapie claimed 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.
Lagarde referred the dispute to a three-member arbitration panel that ruled in favour of Tapie and ordered the payout, which included 45 million euros in moral damages.
Investigating judges are seeking to determine whether the arbitration was a “sham” organised to reward Tapie for his support of Sarkozy.
The IMF chief has consistently denied having acted on the former president’s orders. After a third grilling in March, she had said she “always acted in the interest of the country and in accordance with the law”.