IMF chief Christine Lagarde will go on trial in France on December 12 over a massive state payout to tycoon Bernard Tapie made when she was finance minister, the court hearing the case said Monday. Lagarde, 60, will be tried for negligence by the Court of Justice of the Republic — a tribunal that hears cases against ministers accused of wrongdoing in the discharge of their duties.
The trial could last until December 20, a judicial source told AFP. The IMF boss, who has repeatedly protested her innocence, risks up to a year in prison and a fine of 15,000 euros ($16,850) if found guilty. The case stems from Lagarde‘s handling of a dispute with Tapie, a colourful businessman and former minister, who claimed he was defrauded by a state bank in its sale of sportswear giant Adidas.
Tapie owned Adidas between 1990 and 1993 but lost control of it after he went bankrupt. He also owned the Marseille football team. On becoming finance minister in 2007Lagarde ordered that Tapie’s long-running battle with the state be resolved by arbitration.
The decision proved hugely costly to the state, with Tapie walking away with a staggering 404 million euros ($445 million) in compensation in 2008. Investigators suspect the arbitration process was rigged in favour of Tapie, who had supported then president Nicolas Sarkozy in his 2007 election campaign.
Lagarde, who served as finance minister from 2007 until 2011, has always insisted she acted in France’s best interests. She is not accused of personally profiting from the payment to Tapie but has been criticised for failing to challenge the award. Investigating magistrates accuse her of “serious negligence on the part of a minister tasked with conducting affairs of state” and say Lagarde‘s actions led to a gross “misuse of public money”.
The case threatens to detract fromLagarde‘s otherwise stellar career. She has previously been touted as a possible French presidential contender but denies any such ambitions. The IMF has expressed firm backing for the first woman to head the Fund. Gerry Rice, the Fund’s head of communications, said in a statement sent to AFP that the executive board “continues to express its confidence in the Managing Director’s ability to effectively carry out her duties.”
Lagarde succeeded disgraced compatriot Dominique Strauss-Kahn in the post after he resigned to fight sexual assault charges.