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IMF chief on trial: Lagarde faces French justice IMF chief on trial: Lagarde faces French justice
(about 3 hours later)
The head of the International Monetary Fund (IMF), Christine Lagarde, has gone on trial in France over compensation awarded to Bernard Tapie, a well-connected businessman, in 2008, when she was finance minister.The head of the International Monetary Fund (IMF), Christine Lagarde, has gone on trial in France over compensation awarded to Bernard Tapie, a well-connected businessman, in 2008, when she was finance minister.
She denies wrongdoing. The IMF has backed her though the judicial saga, but her position could become untenable if she is found guilty.She denies wrongdoing. The IMF has backed her though the judicial saga, but her position could become untenable if she is found guilty.
The origins of the case go back to the early 1990s, when Mr Tapie had to sell his business interests to become a minister in the then Socialist government.The origins of the case go back to the early 1990s, when Mr Tapie had to sell his business interests to become a minister in the then Socialist government.
Handling the sale of the sports goods manufacturer Adidas, the Credit Lyonnais (CL) bank found buyers for the equivalent of €320m in 1993. The state-owned bank said this was a good price, but when the investors immediately sold Adidas on for €560m, Mr Tapie cried foul.Handling the sale of the sports goods manufacturer Adidas, the Credit Lyonnais (CL) bank found buyers for the equivalent of €320m in 1993. The state-owned bank said this was a good price, but when the investors immediately sold Adidas on for €560m, Mr Tapie cried foul.
He argued that the bank had deliberately undervalued the company, and pointed out that one of the firms that had flipped Adidas for a huge profit was a subsidiary of CL.He argued that the bank had deliberately undervalued the company, and pointed out that one of the firms that had flipped Adidas for a huge profit was a subsidiary of CL.
Mr Tapie sued the bank for fraud in a court battle that went on for many years.Mr Tapie sued the bank for fraud in a court battle that went on for many years.
What does it have to do with Christine Lagarde?What does it have to do with Christine Lagarde?
She played a key role in the initial settlement. In 2007, as finance minister under the new centre-right President Nicolas Sarkozy, she decided to refer the long-running case to final arbitration.She played a key role in the initial settlement. In 2007, as finance minister under the new centre-right President Nicolas Sarkozy, she decided to refer the long-running case to final arbitration.
This decision was controversial as Mr Tapie had thrown his support behind Mr Sarkozy in the election.This decision was controversial as Mr Tapie had thrown his support behind Mr Sarkozy in the election.
Critics argued that by going to binding arbitration rather than continue fighting Mr Tapie through the courts, Ms Lagarde was repaying favours.Critics argued that by going to binding arbitration rather than continue fighting Mr Tapie through the courts, Ms Lagarde was repaying favours.
Profile: IMF chief Christine LagardeProfile: IMF chief Christine Lagarde
What was the outcome?What was the outcome?
In 2008 the three-member panel awarded Mr Tapie not just compensation, but also interest and other costs - for a total of €404m ($429m; £340m).In 2008 the three-member panel awarded Mr Tapie not just compensation, but also interest and other costs - for a total of €404m ($429m; £340m).
Ms Lagarde decided not to challenge the ruling,Ms Lagarde decided not to challenge the ruling,
This caused was an outcry. Many accused Ms Lagarde of cronyism. In 2011, a group of Socialist MPs launched a corruption case against her.This caused was an outcry. Many accused Ms Lagarde of cronyism. In 2011, a group of Socialist MPs launched a corruption case against her.
A year later Paris prosecutors opened an investigation targeting all the parties to the 2008 decision - including Mr Tapie and the arbitrators. Paris prosecutors later targeted parties to the 2008 decision - including Mr Tapie, arbitrators and other officials - on suspicion of fraud and misuse of public funds. Investigations are still ongoing.
What happened next?What happened next?
The whole compensation deal was eventually thrown out and Mr Tapie was ordered to repay the €404m.The whole compensation deal was eventually thrown out and Mr Tapie was ordered to repay the €404m.
France's highest court cleared Ms Lagarde of the most serious charges in 2014. It said she had no personal links with parties in the Adidas case, and had not benefited from the compensation ruling.France's highest court cleared Ms Lagarde of the most serious charges in 2014. It said she had no personal links with parties in the Adidas case, and had not benefited from the compensation ruling.
But the court also said that her decision to settle the case through arbitration had demonstrated a "grave negligence", paving the way for the present trial.But the court also said that her decision to settle the case through arbitration had demonstrated a "grave negligence", paving the way for the present trial.
What court is trying her?What court is trying her?
That is another controversial point. She is appearing before the Court of Justice of the Republic (CJR), a body set up in 1993 to handle crimes allegedly committed by cabinet ministers.That is another controversial point. She is appearing before the Court of Justice of the Republic (CJR), a body set up in 1993 to handle crimes allegedly committed by cabinet ministers.
As it is composed mostly of politicians, many see it as a way of using the court system to wage political battles.As it is composed mostly of politicians, many see it as a way of using the court system to wage political battles.
Outgoing French President Francois Hollande has vowed to scrap the CJR, arguing that government ministers should be treated like ordinary citizens.Outgoing French President Francois Hollande has vowed to scrap the CJR, arguing that government ministers should be treated like ordinary citizens.
But the court remains in place, and is handling one of the highest-profile cases in its short history.But the court remains in place, and is handling one of the highest-profile cases in its short history.