Christine Lagarde, managing director of the International Monetary Fund, is to stand trial in France over a multimillion-euro government payment to a controversial tycoon who supported former president Nicolas Sarkozy.
Lagarde has been accused of “negligence by a person in a position of public authority” over the award of more than €400m to Bernard Tapie.
Tapie, a former French football team owner and pop star, was awarded the money in a case against the French public bank Crédit Lyonnais, which he accused of undervaluing his stake in Adidas. Lagarde, at the time Sarkozy’s finance minister, referred the long-running case to arbitration and signed off the payout.
French detectives have been looking into whether Tapie was offered a deal in return for supporting Sarkozy in the 2007 presidential election and whether Lagarde was acting on orders of the Elysée Palace – namely Sarkozy – by referring the case to private arbitration.
In ordering a trial, the Cour de Justice de la République, which handles criminal allegations against government officials, went against a ministerial recommendation in September to drop the case against Lagarde.
Thursday’s legal decision was described by Lagarde, who is contesting the case, as “difficult to comprehend”.
Lagarde’s lawyer, Yves Repiquet, told French TV: “It’s incomprehensible. I will recommend that Madame Lagarde appeal against this decision.”
It is the latest twist in a two decade wrangle that began when Tapie sold his majority stake in the then ailing Adidas to a group of private investors for €315.5m. Tapie agreed to the 1993 sale to avoid any conflict of interests when he became a minister in the then Socialist government under François Mitterrand. A year later, the German sports company was bought for €701m by a businessman who was part of the investment group.
Tapie later sued the Crédit Lyonnais bank, which was part of the investment group that had bought Adidas, over its handling of the sale. He alleged that the bank, partly state owned at the time, deliberately undervalued the company before secretly selling it for a far higher price.
The case was pursued through various courts until it was eventually referred by Lagarde to a three-person arbitration panel, which in 2008 awarded Tapie €403m in damages and interest. As Crédit Lyonnais had been wound up and its liabilities taken over by a state-operated consortium, the money was paid out of public funds and the out-of-court settlement caused a national outcry.
At the time, Lagarde tried to calm the escalating political row by saying Tapie would pocket only about €30m once tax and debt payments had been settled. However, he was reported to have kept more than €200m.
