IMF chief to stand trial for ‘negligence’

International Monetary Fund chief Christine Lagarde is to stand trial in France for alleged negligence over a €404m payment to a businessman in 2008, international media report.

Lagarde, who was finance minister in President Nicolas Sarkozy's government, took on her role as IMF director in 2011.

She was still a minister at the time of the compensation award to Bernard Tapie for the sale of a firm, with Tapie supporting Sarkozy in the 2007 presidential election.

According to reports, Lagarde's lawyer described the court's decision as "incomprehensible", and said the IMF boss would appeal.

Quoting a statement by Lagarde, AP said she had "always acted in this affair in the interest of the state and in respect of the law".

Tapie was once a majority shareholder in Adidas but he sold it in 1993 in order to become a cabinet minister in Francois Mitterrand's Socialist government. He later sued the Credit Lyonnais bank over its handling of the sale, alleging that the partly state-owned bank had defrauded him by deliberately undervaluing the company.

The BBC reports that his case was later referred by Lagarde to a three-member arbitration panel which awarded the compensation and investigators suspect he was granted a deal in return for his support of Sarkozy.

Earlier this month, a French court ruled that Tapie was not entitled to any compensation for that sale and should pay back the €404m with interest, it adds.

According to reports, France's Court of Justice of the Republic (CJR) decided that Lagarde,  should be tried on the charge of "negligence by a person in position of public authority" over the compensation case, with a court spokesman later confirming the decision.

If convicted, Lagarde could face up to one year in prison.

 Lagarde's lawyer Yves Repiquet told iTele that he would recommend Lagarde appeal against this decision, and a spokesman for France's attorney general said Lagarde would have five days to appeal.

IMF spokesman Gerry Rice said the organisation - which represents 188 member nations - "continues to express its confidence in the managing director's ability to effectively carry out her duties".