A French court has demanded that International Monetary Fund (IMF) head Christine Lagarde face trial for her reported role in a scandal involving famous financier Bernard Tapie. The scandal dates back to Lagarde’s time as the French Minister of Finance. The court is making the demand despite the fact that France’s top prosecutor recommended in September that the case be dropped.
More than a year ago, a French court started a formal investigation against Lagarde. At the time, Lagarde said that the decision to conduct an investigation was “without basis” and that she would challenge it with a higher court. The investigation concerned Lagarde’s decision to use arbitration to settle a disagreement with Tapie. The arbitration panel ended up awarding more than $455 million to Tapie.
In August of 2014, Lagarde said in a statement, “The magistrates of the court of justice of the Republic have decided to place me under formal investigation. After three years of procedure, the sole surviving allegation is that through inadvertence or inattention I may have failed to intervene to block the arbitration that brought to an end the longstanding Tapie litigation.”
For awhile, it appeared that nothing new was going to come out of the case. But today, a French court has ordered the IMF head to face trial for her role in the scandal. Reports indicate that the case has roots that date back more than 20 years. The case will be heard by magistrates at the Cour de Justice de la Republique, which is used for French crimes that take place in office. Lagarde is being accused of negligence for her role in the Tapie scandal.
However, the top prosecutor in France had recommended that the investigation against Lagarde be dropped. The prosecutor had stated that there was no basis for charging the IMF head. Unsurprisingly, Lagarde shares the same viewpoint as the prosecutor.
A statement issued by Lagarde’s office said, “Ms. Lagarde would like to reaffirm that she acted in the best interest of the French state and in full compliance with the law.”
The lawyer representing Lagarde, Yves Repiquet, added, “A decision like this is incomprehensible. I sent her a text, she was really surprised and very disappointed.”
Despite the charges in France, the executive board of the IMF has expressed confidence in her ability to carry out her duties. Many experts believe that the decision by the French court to move forward with charges against Lagarde shows that the issue is more of a financial matter than a legal matter.
A large number of people have been unhappy with Lagarde for her role in putting additional austerity measures on the debt-ridden country of Greece. It appears that the French want to put a stop to Lagarde before she places sanctions on other EU member countries as well.
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