MercoPress. South Atlantic News Agency

IMF supports Lagarde despite investigation for negligence in France

Ms Lagarde was placed under formal investigation by the French authorities last Wednesday. She described the case against her as “without merit”.

The International Monetary Fund (IMF) has expressed confidence in its leader Christine Lagarde, despite her being investigated for negligence in France. Ms Lagarde, 58, has been questioned about her role in awarding compensation to businessman Bernard Tapie in 2008, when she was Minister of Finance.

 In a statement, the IMF executive board said it was confident Ms Lagarde could continue to lead the organization.

“It would not be appropriate to comment on a case that has been and is currently before the French judiciary,” the executive board, which appoints the IMF's chief, said in a statement.

“However, the executive board has been briefed on recent developments related to this matter, and continues to express its confidence in the managing director's ability to effectively carry out her duties,” it added.

Ms Lagarde was placed under formal investigation by the French authorities last Wednesday. She described the case against her as “without merit”.

Formal investigations in France do not necessarily lead to charges, but indicate that a magistrate believes there are signs of wrongdoing. Investigators suspect Mr Tapie was granted a deal in return for his support of Nicolas Sarkozy in the 2007 presidential election.

Ms Lagarde was finance minister in Mr Sarkozy's government when he was given compensation.

Mr Tapie was once a majority shareholder in sports goods company Adidas but sold it in 1993 in order to become a cabinet minister in Francois Mitterrand's Socialist government.

Mr Tapie sued Credit Lyonnais over its handling of the sale, alleging the partly state-owned bank had defrauded him by deliberately undervaluing the company. His case was later referred by Ms Lagarde to a three-member arbitration panel which awarded the compensation.

Ms Lagarde said last year that her decision to refer Mr Tapie's long-running dispute with Credit Lyonnais to a panel of judges was “the best solution at the time”.

She replaced Dominique Strauss-Kahn as IMF managing director in 2011. He quit over sexual assault charges in New York, which were later dropped.