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IMF's Lagarde to Be Questioned in French Misconduct Case

Thursday, 18 Apr 2013 | 7:48 AM ET
Christine Lagarde, managing director of the International Monetary Fund
Joshua Roberts | Bloomberg | Getty Images
Christine Lagarde, managing director of the International Monetary Fund

International Monetary Fund chief Christine Lagarde will be questioned by a French magistrate in May over an arbitration payment made to a wealthy supporter of former President Nicolas Sarkozy, her lawyer said on Thursday.

Lagarde's lawyer in France, Yves Repiquet, confirmed a report by news website Mediapart that the former French finance minister was to be heard in the case involving billionaire businessman Bernard Tapie.

"I confirm that it's at the end of May," Repiquet told Reuters, asked about Mediapart's report that the hearing would be on May 23.

(Read More: French Minister Faces Formal Tax Fraud Probe)

It is the first time Lagarde has been called in for questioning in an investigation launched in 2011 which could become uncomfortable for her and the International Monetary Fund if she is placed under formal investigation.

Lagarde has denied she did anything wrong when she ended a long-running court battle between the state and Tapie by agreeing to arbitration to settle the dispute.

But a court specialized in cases involving ministers suspects her of complicity in misusing public funds when, as finance minister, she overruled objections from advisers to go ahead with the arbitration.

Lagarde, who has been designated as a suspect despite never profiting personally from the affair, could be placed under formal investigation after the hearing, her lawyer said.

A formal investigation would be more serious than Lagarde's current status.

Another outcome is her designation as an "assisted witness", an intermediary status meaning Lagarde would speak to magistrates with a lawyer but would not be detained.

Repiquet said her summons was routine.

"It's a non-event," he said. "It's normal that she is questioned ... I am not at all nervous about it."

Lagarde said in January that arbitration was the best solution at the time and stood by her decision. Left-wing lawmakers filed a complaint which led to the current legal case.

Lagarde's decision to accept arbitration meant the state paid Tapie 285 million euros ($371.70 million).

(Read More: France's Socialist Government Has 8 Millionaire Ministers)

On Wednesday, an IMF spokesman said it would not be appropriate to comment on a case that was still being examined by a French court.

"The executive board has been briefed on this matter, including recently, and continues to express its confidence in the managing director's ability to effectively carry out her duties," he said.

Lagarde's predecessor at the IMF, Dominique Strauss-Kahn, resigned in 2011 over sex assault charges that were later dropped.

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