Trial casts shadow over IMF’s Lagarde

IMF Managing Director Christine Lagarde speaks during a press conference on "Joint Action Against Tax Fraud and Money Laundering-Transparency at the Global Level," during the IMF and World Bank Group 2016 Spring Meetings on April 14, 2016 in Washington, DC. (AFP PHOTO: MOLLY RILEY)

IMF chief Christine Lagarde (pictured) goes on trial on Monday for her role in a $425 million state payout to businessman Bernard Tapie in 2008 when she was France’s finance minister.

The case has cast a rare shadow over Lagarde, who is widely respected in policy circles for helping the International Monetary Fund turn the page after her predecessor Dominique Strauss-Kahn resigned in 2011 facing sex assault charges.

Lagarde, 60, is accused of negligence for signing off on a highly unusual out-of-court settlement between the state and Tapie, a colorful French businessman with connections to then- president Nicolas Sarkozy.

Lagarde, who was France’s finance minister from 2007 to 2011 before becoming IMF Managing Director, could face up to a year in jail and a fine of 15,000 euros if convicted.

A guilty verdict risks plunging the IMF into a new leadership crisis after Strauss-Kahn’s shock departure.

“She’s very determined to defend herself,” her lawyer Patrick Maisonneuve said. The IMF’s board, which gave her a new five-year mandate earlier this year, has said it stands behind its chief.

The executive board “continues to express its confidence in the managing director’s ability to effectively carry out her duties,” IMF spokesman Gerry Rice told a news briefing in Washington on Thursday.

The case goes back to when Tapie sued the state for compensation after selling his stake in sports company Adidas to Credit Lyonnais in 1993.

He said the bank, owned by the French state at the time, had defrauded him after it later resold its stake for a much higher sum.