25 May 2013

IMF director escapes court investigation

10:43 am on 25 May 2013

After a second day of questioning, a court in Paris on Friday decided not to place International Monetary Fund managing director Christine Lagarde under investigation over a payment made when she was finance minister of France.

The BBC reports 400 million euros ($US516 million) was paid to tycoon Bernard Tapie in 2007 to settle a long-running legal dispute.

Ms Lagarde is not accused of profiting from the payment. The BBC reports she has been made an assisted witness in the case, meaning she will be called upon to testify but is not directly under suspicion.

In 1993 Mr Tapie sold his stake in Adidas to Credit Lyonnais. Soon afterwards, the bank sold the stake for a much bigger profit.

Mr Tapie claimed the bank defrauded him by deliberately undervaluing Adidas at the time of the sale, and an arbitration panel found in his favour.

The Court of Justice of the Republic is looking into claims that Mr Tapie may have received favourable treatment because of his support for former president Nicolas Sarkozy.

Prosecutors said Ms Lagarde should have challenged the arbitration decision.