Christine Lagarde, head of the International Monetary Fund, was found guilty of negligence in an arbitration case on Monday but will remain at her post. The French Court of Justice of the Republic ruled she was guilty on charges of negligence, but Lagarde escaped punishment.
After providing more evidence earlier in the day, Lagarde had left France for Washington, meaning she was not present for the verdict in her trial, a lawyer told Reuters.
Despite the verdict, the IMF’s executive board on Monday reaffirmed its support for Lagarde, who was reappointed to a five-year term in February, saying the international creditor had “full confidence in the managing director’s ability to continue to effectively carry out her duties.”
At the heart of the trial was Lagarde’s 2007 decision to allow a dispute over flamboyant businessman Bernard Tapie’s sale of the Adidas sports brand to Credit Lyonnais bank to be resolved by an unusual private arbitration panel, instead of through the courts.
Tapie had sold Adidas to Credit Lyonnais for the equivalent of 315.5 million euros ($328.6 million) in 1993. The bank sold it on the following year for 701 million euros, prompting claims from Tapie that he had been cheated. The case went to a private arbitration panel, which awarded 404 million euros to Tapie.
Lagarde, a 60-year-old former corporate lawyer, argued in court on Friday that she had acted in good faith in approving the payment to Tapie to settle the row, and that her sole aim had been “to defend the general interest.” But she has faced accusations that the arbitration process was a flawed way to deal with the dispute with Tapie, and was also accused of failing to challenge the very large award that emerged from the arbitration.