IMF chief Christine Lagarde under investigation in France

Written by New York Times | Paris | Updated: Aug 28 2014, 09:45am hrs
Christine LagardeIMF head Christine Lagarde said that French prosecutors had placed her under formal investigation over a murky business affair.
Christine Lagarde, the head of the International Monetary Fund, said on Wednesday that French prosecutors had placed her under formal investigation over a murky business affair that dates to her time as finance minister under former President Nicolas Sarkozy.

Lagarde said in a statement through her lawyer that she was being investigated for simple negligence by the Court of Justice of the Republic, the judicial body that is charged with investigating the conduct of high government officials.

Lagarde, who has denied wrongdoing from the start, said in a statement that the decision by a judicial committee to place her under formal investigation was totally unfounded and that she would be returning to work in Washington on Wednesday afternoon.

She made the announcement a day after she was questioned for a fourth time in the investigation of her role in 2008 during an arbitration proceeding between the government and Bernard Tapie, a one-time cabinet minister and the former owner of the Adidas sportswear empire. Prosecutors had assigned Lagarde the status of assisted witness in the case. Placing her under formal investigation signals that prosecutors believe they have evidence of wrongdoing, but the charge of negligence hardly suggests high crimes.

Negligence by a government official that makes possible the misappropriation or embezzlement of public funds is punishable with a maximum fine of 15,000 euros, or $19,800, and up to one year in prison.

After three years of investigation and dozens of hours of interrogation, the committee concluded that I had not been guilty of any infraction, Lagarde said in the statement, so it was reduced to claiming that I had been insufficiently vigilant during the arbitration.

Lagarde had served as Sarkozys finance minister from 2007 until leaving for the IMF.

Tapie, who had been in a long dispute with a state-owned bank, Credit Lyonnais, walked away from the arbitration with more than 400 million euros.

Stphane Richard, Lagardes former chief of staff and currently the chief executive of Orange, the French telecommunications giant, has already been placed under formal investigation on suspicion of organised fraud.

Prosecutors in Paris could not immediately be reached for


In a statement, the IMF communications director, Gerry Rice, said that Lagarde was now on her way back to Washington and will, of course, brief the board as soon as possible. Until then, we have no further