IMF chief Christine Lagarde found guilty of negligence in arbitration case
A special French court on Monday convicted the International Monetary Fund's Christine Lagarde of negligence for her role in a controversial 2008 arbitration award to a businessman.
Lagarde, who was France’s finance minister at the time, was spared punishment — and a criminal record — in the case, The Associated Press reported.
She began her second five-year term at the IMF last February, but scandal over the case has dogged her for years.
In 2011, Lagarde replaced Dominique Strauss-Kahn, who resigned as the IMF's managing director after he was accused of sexually assaulting a maid in a New York hotel.
Gerry Rice, a spokesman for the Washington, D.C.-based IMF, said after Monday’s verdict that the group's executive board would meet soon “to consider the most recent developments.”
The arbitration case centered on a controversial award given to tycoon Bernard Tapie over the botched 1993 sale of sportswear maker Adidas. Tapie accused the lender Crédit Lyonnais, in which the French state had a stake at the time, of cheating him when it oversaw the sale of his share in the sportswear empire, The New York Times reported.
After years of legal battles, Lagarde in 2007 sent the disputed sale into private arbitration, and a year later a three-person panel awarded Tapie 403 million euros ($425 million) in damages and interest, to be paid by the state.
Lagarde was charged with negligence for allowing the arbitration and for declining to appeal the verdict. They declared the arbitration process and deal fraudulent and ordered Tapie to pay the money back, AP reported. Civil courts in France have since quashed the unusually generous award.
The court on Monday found Lagarde guilty of negligence for declining to appeal the panel’s verdict, but not for allowing the arbitration in the first place, The Times reported.
The Court of Justice of the Republic, made up of three judges and 12 parliamentarians, tries cases concerning ministers for alleged crimes while in office.
Lagarde was not present for Monday's verdict. She maintained her innocence through the weeklong trial. The prosecutor had asked for an acquittal.
Though Lagarde can appeal the verdict on procedural grounds, one of her lawyers, Patrick Maisonneuve, said afterwards that they might not because she had not received a sentence in the case, The Times reported.
“On the one hand, she is found responsible, but given the circumstances, given the responsibilities that Ms. Lagarde had at the time — in 2008, we were in a major economic crisis — the court decided that it would not sentence Ms. Lagarde to anything,” he said.
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