News Column

Lagarde to Appear in Court Over Comp Scandal

April 18, 2013

Gerd Roth

Paris (dpa) - A French court ordered International Monetary Fund (IMF) chief Christine Lagarde to testify at a hearing next month in connection with an inquiry into a large compensation payment to a businessman when she was finance minister, her lawyer said Thursday.

The hearing in Paris at the end of May is linked to an investigation into whether Lagarde abused her authority in 2007 when she referred a long-running dispute between Bernard Tapie and the state to binding arbitration, which earned the businessman compensation of 285 million euros (372 million dollars).

The size of the settlement caused shock in France, where courts generally take a conservative stance towards compensation.

A former politician himself, Tapie was a supporter of then-president Nicolas Sarkozy. Lagarde's critics suggested Tapie's political connections could have played a role in the generous payout, which stemmed from his accusations that the previously state-owned bank Credit Lyonnais defrauded him in the 1993 sale of his share in the sportswear company Adidas.

Lagarde said she had expected to be called to testify.

"Ever since 2011, I have known very well that I would be heard by the investigating commission," she said in Washington.

"I'll be very happy to travel for a couple of days to Paris," Lagarde said, "but it's not going to change my focus, my attention and my enthusiasm for the work that I do. ... I look forward to it."

Last month, French authorities searched Lagarde's Paris home as part of the investigation.

The allegations have failed to dent Lagarde's approval ratings in France. She is consistently rated as one of the country's most popular personalities.

The case does, however, provide unwelcome headlines for the Washington-based IMF as the international crisis lender tries to rebound from the Dominique Strauss-Kahn saga.

Lagarde's French predecessor as IMF chief resigned in May 2011 after being arrested in New York on charges of attempting to rape a hotel maid. Prosecutors later dropped the charges while Strauss-Kahn settled a civil case by the maid out of court.

Source: Copyright 2013 dpa Deutsche Presse-Agentur GmbH

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