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IMF chief Lagarde charged with 'negligence' over graft case

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Paris (27th August, 2014): IMF chief Christine Lagarde, one of the world's most powerful women, announced Wednesday she had been charged with "negligence" over a multi-million-euro graft case relating to her time as French finance minister.

The shock announcement came a day after she was grilled for more than 15 hours by a special court in Paris that probes ministerial misconduct, the fourth time she has been questioned in a case that has long weighed upon her position as managing director of the International Monetary Fund.

Lagarde has been placed under formal investigation by the investigating commission of the court of justice of the French Republic.

In France, being placed under formal investigation is the nearest equivalent to being charged, and happens when an examining magistrate has decided there is a case to be answered.

It does not, however, always lead to a trial.

Placed under investigation her fate now hangs on what the IMF board of directors will decide, responding to the current scenario.

She replaced Dominique Strauss-Kahn as IMF chief in 2011 after he became embroiled in a New York sex scandal involving a hotel maid.

The case relates to her handling of a 400-million-euro (USD 527-million) state payout to disgraced French tycoon Bernard Tapie in 2008, which investigating judges suspect may have been doled out in return for his support of ex-president Nicolas Sarkozy in the 2007 election.

The payout to Tapie was connected to a dispute between the businessman and partly state-owned bank Credit Lyonnais over his 1993 sale of sportswear group Adidas.

Tapie claimed Credit Lyonnais had defrauded him by intentionally undervaluing Adidas at the time of the sale and that the state, as the bank's principal shareholder, should compensate him.

Lagarde referred the dispute to a three-member arbitration panel that ruled in favour of Tapie and ordered the payout, which included 45 million euros in moral damages.

Investigating judges are seeking to determine whether the arbitration was a "sham" organised to reward Tapie for his support of Sarkozy.

 



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