POLITICS

IMF Chief Christine Lagarde Charged In Political Corruption Probe

27/08/2014 12:04 BST | Updated 27/08/2014 19:59 BST

The head of the International Monetary Fund, Christine Lagarde, has been charged with "negligence" in a corruption investigation relating to her time as French finance minister.

“The investigating commission of the court of justice of the French Republic has decided to place me under formal investigation," she told Agence France Press.

French authorities place someone under investigation when they believe there are indications of wrongdoing, but that does not always lead to a trial. Lagarde insisted she would not resign as head of the top international economics body and would fight the decision.

The case revolves around a near 400m (£318m) payout in 2008 to French tycoon Bernard Tapie, who claimed to have been conned by the formerly state-owned bank Credit Lyonnais over his share sale of sportswear chain Adidas in 1993.

Tapie accused Credit Lyonnais of defrauding him by deliberately undervaluing Adidas at the time of the sale and argued that the state, as the bank's main shareholder, should compensate him.

Lagarde, as finance minister, referred the dispute to an arbitration panel which ruled in favour of Tapie. Investigators are looking into whether Tapie received the payout in exchange for supporting Sarkozy in the last two French presidential elections.

The situation surrounding Tapie has embroiled many of his former cabinet ministers, including Lagarde. Five people have been charged so far, including Lagarde's former chief of staff, Stephane Richard.

The IMF chief, who has always denied wrongdoing, said: "After three years of procedure the only surviving allegation is that through inattention I may have failed to block the arbitration that put an end to the long standing Tapie litigation."

Les grandes dates de l'affaire Tapie-Lagarde