France: IMF chief Lagarde returns to court for questioning

International Monetary Fund chief Christine Lagarde faces a second day of questioning on Friday after being grilled for hours a day earlier as French prosecutors try to determine whether she should face charges over a state payout to a controversial businessman in 2007, when she was serving as finance minister.

Lagarde, 57, left a Paris court late on Thursday after facing around 12 hours of prosecutor questions. "See you tomorrow," she told reporters as she left the building.

Her court appearance came a day after Lagarde, the first woman to run an organisation considered a pillar of the international financial system, was named the world's seventh-most-powerful woman by Forbes magazine.

The Court of Justice of the Republic (CJR), which probes cases of ministerial misconduct, is seeking an explanation of her 2007 handling of a row that resulted in a €400 million ($515 million) payout to controversial businessman Bernard Tapie. Court prosecutors suspect he received favourable treatment in return for supporting Lagarde ally Nicolas Sarkozy in the 2007 presidential election, which he subsequently won.

They have suggested Lagarde was partly responsible for "numerous anomalies and irregularities" that could lead to her facing charges for complicity in fraud and misappropriation of public funds.

The investigation centres on her 2007 request to a panel of judges to arbitrate a dispute between Tapie and Credit Lyonnais – formerly a partly state-owned bank – over his 1993 sale of sports group Adidas. Tapie accused Credit Lyonnais of defrauding him by knowingly undervaluing Adidas at the time of the sale and argued that the state, as the principal shareholder in the bank, should pay him compensation.

Lagarde has said the arbitration was necessary to put an end to a costly legal dispute, and has always denied having acted under orders from Sarkozy.

Tapie’s arguments were upheld by an arbitration panel but critics claimed the state should not have risked being forced to pay compensation to a convicted criminal who, as he was bankrupt at the time, would not have been able to pursue the case through the courts. Tapie served time in prison for match-fixing when he was president of the French football club Olympique de Marseille.

The payment Tapie received enabled him to clear his huge debts and tax liabilities and, according to media reports, left him with between €20 million and €40 million that he has used to relaunch his career.

Criminal charges against Lagarde would be a second straight disgrace for a French IMF chief. Her predecessor and compatriot, Dominique Strauss-Kahn, resigned from the IMF in 2011 following allegations that he sexually assaulted a New York hotel maid.

Lagarde has downplayed the investigation, but the stakes are high for both her and the organisation she represents, which nevertheless has expressed confidence in its chief.

"The executive board has been briefed on that matter, including recently, and continues to express its confidence in the managing director's ability to effectively carry out her duties," IMF spokesman Gerry Rice said in Washington.

Source: http://www.france24.com/en/20130524-imf-chief-lagarde-court-questioning-tapie