New IMF chief faces forgery and fraud probe
Source: Agencies |
August 5, 2011, Friday
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Print Edition
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A French court yesterday ordered an investigation into new International Monetary Fund chief Christine Lagarde's role in a US$400 million arbitration deal in favor of a tycoon.
Investigators will this week open an inquiry into possible charges of "complicity to embezzle public funds" and "complicity to forgery," prosecutors said.
Lagarde was France's finance minister when magnate Bernard Tapie won a 2008 settlement with a French state-owned bank Credit Lyonnais over the mishandled sale of sportswear maker Adidas in the 1990s. Critics viewed the settlement as an overly generous handout of taxpayers' money.
The investigation comes as Lagarde is working to improve the reputation of the IMF after her predecessor, Dominique Strauss-Kahn, quit to face charges of attempting to rape a New York hotel maid. He denies the charges.
A commission at France's Court of Justice of the Republic - which handles cases involving government ministers - decided an investigation should be launched into Lagarde's role in the arbitration deal.
The inquiry is likely to take months and may not result in a trial. But if it does, and if Lagarde is convicted, she could face up to 10 years in prison. Lagarde can be questioned by prosecutors only if preliminary charges will eventually be filed.
The investigation has been prompted by a request from a senior prosecutor in May, who said he suspected Lagarde overstepped her authority in allowing the arbitration.
Lagarde's lawyer, Yves Repiquet, said his client is not worried about the investigation and even welcomes it. "We will get to the bottom of things. There will no longer be the least doubt," he said.
The possibility of a French investigation dogged Lagarde even before she was appointed to head the IMF, and the institution's executive board reiterated its confidence in her yesterday. The Tapie case was discussed before Lagarde's selection and "the board is confident she will be able to carry out her duties effectively," it said.
Critics in France have said the Adidas case should not have gone to private arbitration because it involved a state-owned bank, and that Lagarde should have questioned the independence of one of the arbitration panel's judges.
Investigators will this week open an inquiry into possible charges of "complicity to embezzle public funds" and "complicity to forgery," prosecutors said.
Lagarde was France's finance minister when magnate Bernard Tapie won a 2008 settlement with a French state-owned bank Credit Lyonnais over the mishandled sale of sportswear maker Adidas in the 1990s. Critics viewed the settlement as an overly generous handout of taxpayers' money.
The investigation comes as Lagarde is working to improve the reputation of the IMF after her predecessor, Dominique Strauss-Kahn, quit to face charges of attempting to rape a New York hotel maid. He denies the charges.
A commission at France's Court of Justice of the Republic - which handles cases involving government ministers - decided an investigation should be launched into Lagarde's role in the arbitration deal.
The inquiry is likely to take months and may not result in a trial. But if it does, and if Lagarde is convicted, she could face up to 10 years in prison. Lagarde can be questioned by prosecutors only if preliminary charges will eventually be filed.
The investigation has been prompted by a request from a senior prosecutor in May, who said he suspected Lagarde overstepped her authority in allowing the arbitration.
Lagarde's lawyer, Yves Repiquet, said his client is not worried about the investigation and even welcomes it. "We will get to the bottom of things. There will no longer be the least doubt," he said.
The possibility of a French investigation dogged Lagarde even before she was appointed to head the IMF, and the institution's executive board reiterated its confidence in her yesterday. The Tapie case was discussed before Lagarde's selection and "the board is confident she will be able to carry out her duties effectively," it said.
Critics in France have said the Adidas case should not have gone to private arbitration because it involved a state-owned bank, and that Lagarde should have questioned the independence of one of the arbitration panel's judges.
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