The case hinges on whether Lagarde was being negligent with state funds when, as French finance minister, she signed off on a €400 million ($432 million) payment to businessman Bernard Tapie, who sold his stake in Adidas to investment bank Credit Lyonnais but later alleged fraud, after the bank turned around and sold the stake for a higher price. He was ordered to pay the money back earlier this month.
The payment from the government’s coffers was a problem because Tapie was friends with France’s then-president Nicolas Sarkozy; some alleged that the thing whiffed of preferential treatment, per France24:
Critics argue that the state should not have paid compensation to a convicted criminal who was bankrupt at the time and would not have been able to pursue the case in court. Tapie spent six months in prison in 1997 for match-fixing during his time as president of popular French football club, Olympique Marseille.
Critics also say that Lagarde ensured Tapie received preferential treatment by referring the matter to arbitration due to his financial support for former French president Nicolas Sarkozy – Lagarde’s boss at the time – in his 2007 presidential bid.
The case has been bouncing back and forth over questions regarding Lagarde’s role in the l’affaire Tapie. Reuters is reporting that the case is going to trial in spite of the prosecutors insistence that the matter be dropped. The IMF, which brought in Lagarde in 2011 as a replacement for Dominique Strauss-Kahn after his tenure was derailed by sexual-assault allegations, last year said that it would be standing by Lagarde during the scandal, and she has already appealed the court decision, according to AP.
qz
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