Lagarde ‘presumed innocent,’ can stay as IMF chief: French minister

IMF chief Christine Lagarde is being ordered to stand trial in France over her role in a controversial payout of state funds

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IMF chief Christine Lagarde should remain in her post despite being ordered to stand trial in France over her role in a controversial payout of state funds in a commercial dispute, France’s finance minister said Thursday.

Speaking to reporters in New York, Finance Minister Michel Sapin expressed support for Lagarde after she was ordered to stand trial over her handling of a 403 million euro ($433 million) payment to French tycoon Bernard Tapie when she was finance minister.

“There is no reason today to modify the exercise of her responsibilities,” he said. “France as a member of the board of the IMF considers Madame Lagarde perfectly capable of continuing to assume her responsibilities,” he said.

Sapin was in New York for a meeting of finance ministers from UN Security Council countries to discuss how the Islamic State group funds its activities.

“She is presumed innocent so I do not see how this could hinder the exercise of her current responsibilities,” he said.

“French law is founded on an absolute principle which is the presumption of innocence,” he said. “Madame Christine Lagarde benefits from the presumption of innocence.”

Sapin deflected a question about whether France might lose the leadership of the IMF if Lagarde were forced to step down.

He likewise refused to comment on the case itself, saying the court “will do its work, it will do so to the very end ... without there being any comment on its work by the French government.”

According to a judicial source, the special court investigating the payment to Tapie has ordered Lagarde to be tried for negligence in the handling of public finances. She was questioned in mid 2014.

The affair goes back to 2008 when a private arbitration panel, validated by the finance ministry during Lagarde’s tenure, awarded Tapie the huge settlement in a dispute with the partly state-owned Credit Lyonnais bank over the sale of Adidas in 1994.

The negligence charge results from Lagarde’s failure to challenge the award, which was hugely beneficial to Tapie but prejudicial to the state.

Investigating judges are probing whether the arbitration was a “sham” organized to reward Tapie for his support of then president Nicolas Sarkozy.

Lagarde has consistently denied wrongdoing or that she acted on Sarkozy’s orders.