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Paris: Christine Lagarde, the managing director of the International Monetary Fund (IMF), was found guilty on Monday of criminal charges linked to the misuse of public funds during her time as France's finance minister, a verdict that could force her out of her post.
Lagarde, who began her second five-year term at the IMF in February, will not face any jail time, the judge said. The scandal has overshadowed her work at the fund, to which she was appointed in 2011 after Dominique Strauss-Kahn resigned as managing director when he was accused of having sexually assaulted a maid in a New York City hotel.
French judges have found IMF chief Christine Lagarde guilty of negligence for failing to challenge a 400 million euro state arbitration payout to a business tycoon in 2008 when she was French finance minister.
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French judges have found IMF chief Christine Lagarde guilty of negligence for failing to challenge a 400 million euro state arbitration payout to a business tycoon in 2008 when she was French finance minister.
The move is likely to destabilise the IMF as it faces a host of thorny issues, including questions over its participation in a multibillion-dollar bailout for Greece and uncertainty about the role of the US in the organisation once Donald Trump becomes president in January.
The verdict was a surprise, after the prosecutor in the trial said last week the case against her was "very weak" and did not appear to be enough to win a conviction. It is a theme prosecutors have previously repeated.
IMF chief Christine Lagarde has been found guilty of negligence. Photo: AP
The trial revived concerns in France about high-level corruption, shining a spotlight on intimate ties between politicians and businesspeople, and on the large sums that are sometimes used to grease the country's political wheels.
The case against Lagarde centred on Bernard Tapie, a former entertainer and owner of Adidas who had previously been jailed on corruption charges. Tapie accused the lender Crédit Lyonnais, in which the French state had a stake at the time, of cheating him when it oversaw the sale of his share of the sportswear empire in 1993. Years of costly legal battles ensued.
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In 2007, Lagarde sent the dispute to a three-person private arbitration authority that awarded Tapie more than €400 million in damages and interest, to be paid by the state.
Her critics said that decision was politically tainted, and she was charged with negligence for allowing the arbitration and for then declining to appeal the panel's verdict.
French judge Patrick Maisonneuve outside court following the conviction of Christine Lagarde. Photo: Bloomberg
The trial against Lagarde was just one facet of the scandal – many people associated with it are under investigation for accusations as varied as embezzlement and organised fraud.