Thursday, April 18, 2013

IMF's Lagarde to be questioned in French misconduct case: website

PARIS (Reuters) - IMF chief Christine Lagarde has been summoned for questioning over an arbitration payment to a wealthy supporter of former French President Nicholas Sarkozy, news website Mediapart reported on Wednesday.

Lagarde, France's former finance minister, is due to appear before magistrates on May 23 and could be placed under formal investigation, Mediapart said citing unnamed sources.

Lagarde has said she did nothing wrong when she ended a court battle between the state and billionaire businessman Bernard Tapie by accepting arbitration to settle the dispute.

Magistrates from a special court that handles alleged abuses by government ministers suspect Lagarde of complicity in misusing public funds as finance minister when she overruled objections from advisers to go ahead with the arbitration.

As a result of the decision to accept arbitration, the state ended up paying 285 million euros ($371.70 million) of taxpayers' money to Tapie.

A formal investigation would deal a blow to the head of the International Monetary Fund, after it turned the page on the resignation of her predecessor, Dominique Strauss-Kahn, over sexual assault charges that were later dropped.

The investigation has been open since 2011 and Lagarde has never been summoned for questioning, although authorities searched her Paris apartment last month.

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 in 1993.

He claimed the bank had defrauded him after it later resold his stake for a much higher sum. Credit Lyonnais, now part of Credit Agricole, has denied any wrongdoing.

Tapie has been a political supporter of Sarkozy.

Mediapart has been in the spotlight in France since it reported last December that budget minister Jerome Cahuzac held a secret Swiss bank account.

Cahuzac resigned last month to fight the revelation, but later acknowledged it was correct, plunging the government into a political crisis that is stirring public debate about ethics in French politics. ($1 = 0.7668 euros)

(Reporting by Leigh Thomas; Editing by Stacey Joyce)

Source: http://news.yahoo.com/imfs-lagarde-questioned-french-misconduct-case-website-230124839--finance.html

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