News / Europe

IMF's Lagarde Appears in Court for French Arbitration Case

IMF chief Christine Lagarde (L) arrives to be questioned by a French magistrate in Paris, May 23, 2013.IMF chief Christine Lagarde (L) arrives to be questioned by a French magistrate in Paris, May 23, 2013.
x
IMF chief Christine Lagarde (L) arrives to be questioned by a French magistrate in Paris, May 23, 2013.
IMF chief Christine Lagarde (L) arrives to be questioned by a French magistrate in Paris, May 23, 2013.
Reuters
IMF chief Christine Lagarde was questioned in court by a French magistrate on Thursday over her role in a 285-million-euro [$366 million] arbitration payment made to a supporter of former president Nicolas Sarkozy.

Lagarde risks being placed under formal investigation at the hearing for her 2007 decision as Sarkozy's finance minister to use arbitration to settle a long-running court battle between the state and high-profile businessman Bernard Tapie.

Under French law, that step would mean there exists “serious or consistent evidence” pointing to probable implication of a suspect in a crime. It is one step closer to trial, but a number of such investigations have been dropped without any trial.

Such a move could prove uncomfortable for the International Monetary Fund, whose former head, Frenchman Dominique Strauss-Kahn, quit in 2011 over a sex assault scandal, and for a woman rated the most influential in France by Slate magazine.

“It's a pleasure to see you,” a smiling Lagarde said to reporters as arrived at the Paris court with her lawyer for a hearing that could last into Friday.

They were not expected to emerge until the end of the day's proceedings, which could run into late evening. The decision on whether to place her under investigation or give her “supervised witness” status will be announced at the end of the hearing.

The case goes back to 1993 when Tapie, a colorful and often controversial character in the French business and sports world, sued the state for compensation after selling his stake in sports company Adidas to then state-owned bank Credit Lyonnais.

Also a one-time Socialist minister who later supported the conservative Sarkozy, Tapie said the bank defrauded him after it resold the stake for a much higher sum. Credit Lyonnais, now part of Credit Agricole, has denied wrongdoing.

Lagarde is not accused of financially profiting herself from the payout and has denied doing anything wrong by opting for an arbitration process that enriched Tapie. With interest, the award amounted to 403 million euros.

A court specializing in cases involving ministers is targeting her for complicity in the misuse of funds, however, because she overruled advisers to seek the settlement.

Her lawyer, Yves Repiquet, told French media that Lagarde had merely approved the use of an arbitration procedure that had been decided by the state-owned holding company, Consortium de Realization, set up to take over the debts and liabilities of Credit Lyonnais when it fell into difficulty in the early 1990s.

Tapie unruffled

Sources close to the IMF board have said they are not worried by the affair and are confident Lagarde herself did not profit from it. But they added the board might review its position if judicial procedures took her away from her duties.

Tapie said on Thursday he was “delighted” the affair was being investigated. While earlier probes had found his settlement to be perfectly legal, further examination would show how justified he had been in seeking compensation, he said.

“If there had been anything untoward in the arbitration it would have come out a long time ago,” he told Europe 1 radio, adding: “None of these legal cases are to see if I am dishonest, they are to find out how much I was robbed of.”

Lagarde, tasked with moving the IMF past the Strauss-Kahn scandal, has made her mark at the Fund by taking a firm yet pragmatic stance in the austerity-versus-growth debate raging as Europe struggles to pull itself out of a long crisis.

Appointed in part for the negotiating skills she used in brokering Europe's response to the 2008-09 global financial crisis, she has shown firmness at the IMF in insisting on the need for nations to stick to budgetary rigor when possible.

Current Finance Minister Pierre Moscovici told Le Monde newspaper that Lagarde retained the support of the French government, but said that it would appeal against the arbitration award if she was placed under formal investigation.

You May Like

As US Strikes Syria, China Sees Parallels at Home

Beijing is debating how much support to give international coalition against IS militants and trying to figure out how many Chinese nationals may have joined group overseas More

CDC: Ebola Could Infect 1.4 M by 2015

US health officials say if efforts to curb the outbreak are not increased, cases will soar dramatically by early next year More

Video USAID Provides $231 Million for Girls Education in 5 Countries

US Agency for International Development partners with celebrities to call attention to importance of education for girls worldwide More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Washington to Pyongyang: 'Shut This Evil System Down'i
X
Scott Stearns
September 23, 2014 10:52 PM
U.S. Secretary of State John Kerry is calling on North Korea to shut down prison camps and other human rights abuses following a United Nations Commission of Inquiry into "widespread and systematic human rights violations." VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Washington to Pyongyang: 'Shut This Evil System Down'

U.S. Secretary of State John Kerry is calling on North Korea to shut down prison camps and other human rights abuses following a United Nations Commission of Inquiry into "widespread and systematic human rights violations." VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video US, Gulf Allies Strike Islamic State Militants in Syria

United States forces have carried out strikes against Islamic State or ISIL militant positions in Syria - the first time Western forces have taken action on Syrian soil. Five U.S. allies from the Gulf joined the military action. Local reports suggest dozens of militants were killed. The U.S. also carried out unilateral missile strikes against a Syria-based terror group which Washington says poses an imminent threat to the West. Henry Ridgwell reports from London.
Video

Video High Intensity Focused Ultrasound Used to Kill Cancer Tumor

There is a new way of killing certain cancer tumors that allows the patient to go home on the same day. Surgeons at the Keck Medical Center of the University of Southern California became the first doctors to use this procedure on a patient with the help of high intensity focused ultrasound, or HIFU, and new robotic technology. Elizabeth Lee reports from Los Angeles.
Video

Video USAID Provides $231 Million for Girls Education in Five Countries

Hollywood stars Alicia Keys, Jennifer Garner and 30 others have voiced their support for a U.S.-backed initiative called "Let Girls Learn." The $231 million program, funded by the U.S. Agency for International Development, is aimed at ensuring public and quality education for girls worldwide. As VOA's Mariama Diallo reports, this new program will focus on five countries in Africa, South Asia, Latin America and the Middle East.
Video

Video UN: Relocation of Bedouins in Israel Weakens Two-state Solution

Rural Bedouins living in disputed lands east of Jerusalem could soon find themselves forcibly relocated. VOA's Sharon Behn reports from Jerusalem that while Israel defends the move as in the Bedouins’ best interests, the United Nations says the plan threatens the survival of the two-state solution with Palestinians.
Video

Video NASA’s MAVEN Probe Enters Mars Orbit

NASA’s newest Mars probe, called MAVEN, has successfully entered its designated orbit around the Red Planet. Scientists will use its sophisticated instruments to try to learn what happened to the atmosphere Mars had a few billion years ago. VOA’s George Putic has more.
Video

Video Prolonged Drought Plagues SW Oklahoma Farmers

Parts of western Texas and southwestern Oklahoma have been in drought conditions for several years running and the deficit in rainfall has taken a heavy toll on cotton and grain production. Oklahoma Governor Mary Fallin says the state has suffered $2 billion in agricultural losses since 2011. There has been rain in recent weeks, but, as VOA’s Greg Flakus reports from Altus, Oklahoma, for most farmers it has been too late.
Video

Video For West Ukraine City, Conflict Far Away Yet Near

The western Ukrainian city of Lviv prides itself on being both physically and culturally close to Western Europe. The Russian-backed separatists in the eastern part of the country are 1,200 kilometers away, and seemingly even farther away in their world view. Still, as VOA’s Al Pessin reports, the war is having an impact in Lviv.
Video

Video Saving Global Fish Stocks Starts in the Kitchen

With an estimated 90 percent of the world’s larger fish populations having already vanished, a growing number of people in the seafood industry are embracing the concept of sustainable fishing and farming practices. One American marine biologist turned restaurateur in Thailand is spreading the word among fellow chefs and customers. VOA Correspondent Steve Herman reports from Bangkok.
Video

Video Chinese Admiral Key in China’s Promotion of Sea Links

China’s President last week wrapped up landmark visits to India, Sri Lanka and Maldives, part of a broader campaign to promote a new “Maritime Silk Road” in Asia. The Chinese government’s promotion efforts rely heavily on the country’s best-known sailor, a 15th century eunuch named Zheng He. VOA's Bill Ide reports from the sailor’s hometown in Yunnan on the effort to promote China’s future by recalling its past.
Video

Video Experts Fear Ebola Outbreak ‘Beyond Our Capability to Contain’

Each day brings with it new warnings about the deadly Ebola outbreak already blamed for killing more than 2,600 people across West Africa. And while countries and international organizations like the United Nations are starting to come through on promises of help for those most affected, the unprecedented speed with which the virus has spread is raising questions about the international response. VOA's Jeff Seldin has more from Washington.
Video

Video Migrants Caught in No-Man's Land Called Calais

The deaths of hundreds of migrants in the Mediterranean this week has only recast the spotlight on the perils of reaching Europe. And for those forunate enough to reach a place like Calais, France, only find that their problems aren't over. Lisa Bryant has the story.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid