Tapie case: Lagarde faces formal probe

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Christine Lagarde (pictured), head of the International Monetary Fund (IMF) has confirmed today that she is placed under official investigation for suspicion of negligence in a French corruption probe.

In 2008, Lagarde decided to allow arbitration to settle a dispute between businessman Bernard Tapie and the former state-owned bank credit Lyonnais, which resulted in a $507m (€385m) payout for Tapie.

French businessman Bernard Tapie had sold his stake as majority shareholder of Adidas in the early nineties and subsequently sued the defunct Credit Lyonnais claiming that it has deliberately undervalued his stake.

The recent case is based on allegations that the settlement dispute was influenced by Tapie’s support for Sarkozy’s presidential elections in 2007.

Lagarde stressed that she would not resign from her position as head of the IMF.

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