IMF boss Lagarde faces more grilling over payment to tycoon

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IMF boss Lagarde faces more grilling over payment to tycoon

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IMF boss Christine Lagarde is undergoing a second day of grilling by a French court on her conduct during a disputed arbitration payment to one of France’s most colourful but controversial personalities.

The hearings could lead to Lagarde being placed under formal investigation for misuse of public funds and conspiracy to fraud. She is not accused of personally profiting from her decision when she was French finance minister in 2007, but of facilitating the payment of over 400 million euros to high profile businessman Bernard Tapie.

A one-time socialist minister who was jailed for match-fixing involving his football team Olympique Marseille, Tapie sold the sports equipment firm Adidas in the 1990s to the state-owned Credit Lyonnais bank. It went bust, the state picked up the pieces, and a long-running legal dispute ensued with Tapie claiming he had been defrauded.

It is alleged that Christine Lagarde approved the compensation deal for Tapie in connection with his decision to switch sides from the socialists and instead support former President Sarkozy. She denies the claims, insisting any action she took was to protect the French taxpayer from the costs of the interminable legal wrangle.