By Eric King
The head of the International Monetary Fund (IMF), Christine Lagarde, must stand trial for her role in a £440m (336) euro government payment to a controversial tycoon who supported former president Nicolas Sarkozy.
The Supreme Court in France ruled on Friday that Lagard must answer of negligence into the huge pay out , after rejecting Lagarde’s appeal against a judge’s order in December against the trial at the Cour de Justice de la République- special court that tries ministers for crimes in office. The court also went against a ministerial recommendation in September to drop the case.
Bernard Tapie, a former French football team owner and pop star, was awarded the mammoth €440m (£336m) in a case against the French public bank Crédit Lyonnais, which he accused of undervaluing his majority stake in Adidas.
Lagarde, who at the time was Sarkozy’s finance minister, referred the long-running case to arbitration and signed off the pay out. However, French investigators have suspicious that the deal may have been in return for the tycoon supporting Sarkozy in the 2007 presidential election. Lagarde is suspected of acting on orders of the newly elected President by referring the case to private arbitration.
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The Court de Justice de la République were right to go against a ministerial recommendation in September to drop the case., because the case stinks of favouritism. One can smell a rat just observing the facts of the case.
The 60 years old IMF chief, who started a second mandate at the IMF this month, has always protested her innocence, but then again not many people would admit guilt in such a case where imprisonment will automatically result.
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A former lawyer, she is accused of negligence in public office in relation to the misuse of public funds. She may have to dig deep into her legal skills to assist any lawyer from getting her off this serious allegation.
Mr.Tapie’s disputed compensation in 2008 for allegedly being defrauded by Crédit Lyonnais – a defunct state-owned bank came about after an unusual arbitration hearing about his claim. Mr Tapie claimed the bank encouraged him to sell his stake in Adidas, the sports equipment company, for less than it was worth in 1993.
The state resisted his claim, only to change their approach by using an arbitration to settle the case shortly after Mr Sarkozy was election campaign was successful and he became President. However, because Mr Tapie had been an avid supporter for Mr Sarkozy’s election campaign., deep suspicions arose that a dodgy deal was struck to allow the huge compensation pay out.
A Paris court subsequently voided the arbitration on the grounds that it was fraudulent and ordered Mr Tapie – a tycoon, and former socialist to repay the huge sum. Chances are that this is indeed a case of fraud or dodgy dealing, but her lawyers are confident she will be exonerated.
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