A French court yesterday ordered an investigation into new IMF managing director Christine Lagarde’s role in a much-criticized US$400 million arbitration deal in favor of a controversial tycoon.
Lagarde was France’s finance minister when Bernard Tapie won a settlement in 2008 with a state-owned bank over the mishandled sale of sportswear maker Adidas in the 1990s.
Lagarde took over as head of the IMF last month after her predecessor, Dominique Strauss-Kahn, quit to face charges he tried to rape a New York hotel maid.
A commission at France’s Court of Justice of the Republic decided yesterday that an investigation should be launched into Lagarde’s role in the arbitration deal. It is a special court that only to handle cases involving government ministers.
A senior prosecutor had requested an investigation in May, saying he suspected Lagarde overstepped her authority.
Lagarde’s lawyer, Yves Repiquet, said she was not worried about the investigation and even welcomes it.