20 December 2016
A French court found, Christine Lagarde, head of the International Monetary Fund (IMF), guilty of negligence in allowing a massive government pay-out to a business tycoon, Bernard Tapie , while she was Finance Minister in France. Though Judge Martine Ract Madoux did not hand down a jail term, he said that Largarde “should have done more” to prevent the $422m pay-out, Bloomberg reports. During the trial the trial Largarde said that she had always acted in good faith.
Lagarde is touted to be a Presidential candidate at the next French election. She is also the preferred choice of Angela Merkel of Germany, to be the next President of the European Union. The lighter sentence may be to not jeopardize her future.
Bernard Tapie was a majority shareholder in sports goods company Adidas from 1990 to 1993. He was Minister of City Affairs from 26 December 1992 to 28 March 1993. Tapie is a close associate and financial backer of former French president Nicolas Sarkozy. Tapie claimed that Crédit Lyonnais had defrauded him by under valuing the company when it sold Adidas on his behalf to Robert Louis-Dreyfus, apparently by arranging a larger sale with Dreyfus without Tapie’s knowledge. Crédit Lyonnais at that time was owned by French government.
Largarde ordered that the dispute should go to arbitration. The arbitration panel of judges ruled that Mr Tapie should receive damages of $422m including interest.
A Paris appeals court reversed the arbitration panel decision and ordered Mr Tapie to reimburse the state, but the businessman has lodged an appeal, which is still pending.
Lagarde’s predecessor at the IMF, Dominique Strauss-Kahn, resigned in 2011. He was accused of sexually harassing a maid in a New York City hotel. The case was later dropped and a civil suit was settled out of court.
The IMF board said it retained “full confidence” in her leadership but would meet soon “to consider the most recent developments”. She was reappointed to a five-year term at the IMF in February.
France: IMF Chief convicted for negligence but without jail term
20 December 2016