IMF chief under investigation

August 28, 2014 - 1:51:47 am

PARIS: IMF chief Christine Lagarde has been put under formal investigation by French magistrates for alleged negligence in a political fraud affair dating from 2008 when she was finance minister.

Lagarde was questioned by magistrates in Paris this week for a fourth time under her existing status as a witness in the long-running saga over allegations that tycoon Bernard Tapie won a large arbitration payout due to his political connections. The inquiry relates to allegations that Tapie, a supporter of conservative former president Nicolas Sarkozy, was improperly awarded ¤403m ($531m) in an arbitration to settle a dispute with now defunct state-owned bank Credit Lyonnais.

“After three years of procedure, the sole surviving allegation is that through inadvertence or inattention I may have failed to intervene to block the arbitration that brought to an end the longstanding Tapie litigation,” she said in a statement yesterday. “I have instructed my lawyer to appeal this decision, which is without merit.”

Under French law, magistrates place a person under formal investigation when they believe there are indications of wrongdoing, but that does not always lead to a trial.

REUTERS

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