Case linked to massive state payout to tycoon after sale of adidas
International Monetary Fund (IMF) chief Christine Lagarde went on trial in France yesterday over a massive state payout to a flamboyant tycoon when she was finance minister.
Lagarde denies the charges of negligence, arguing she was acting in the state’s interest in approving the payment to Bernard Tapie, the former owner of sportswear giant adidas.
If found guilty, the 60-year-oldcould receive a maximum one year prison sentence and aß15 000 (R217 00) fine.
“I don’t plan to keep quiet,” Lagarde told the presiding judge, when advised of her right to remain silent.
In a documentary aired on French television on Sunday, Lagarde said: “I tried to do my work the best I could within the limits of what I knew.
“Negligence is an unintentional offence. I think all of us have been a little bit negligent at some stage of our lives.”
Whatever the outcome, the case risks damaging the image of the former corporate lawyer who progressed through the finance ministry to become one of the world’s most powerful women.
The IMF has given its full backing to its managing director, who began her second term in the post in July.
The accusations stem from Lagard e ’s handling of a dispute with Tapie, a former government minister who claimed that a state bank had defrauded him in its sale of adidas.
Tapie, now 73, owned the firm between 1990 and 1993 but lost control of it when he went bankrupt. He sold it to state owned bank Credit Lyonnais forß315.5-million (R4.5-billion) in February 1993.
The bank sold it a year later for ß701-million (R10.2-billion),leading Tapie to claim he had been cheated.
Lagarde, on becoming finance minister in 2007 under then president Nicolas Sarkozy, ordered that Tapie’s long-running battle with the state be resolved by arbitration.
Tapie initially walked away with a staggering ß404-million(R5.6-billion) in compensation in 2008. After a lengthy court battle, he was ordered to repay the money.
Investigators suspect the arbitration process was rigged in favour of Tapie, who had supported Sarkozy in his 2007 election campaign.
Lagarde, who served as finance minister until 2011, has always insisted she acted in France’s best interest.
Although she is not accused of personally profiting from the payment, she has been criticized for failing to challenge the award.
Tapie is among six people charged in a separate fraud case related to the payout, including the head of telecoms company Orange, Stephane Richard, a former aide to Lagarde.