IMF board to meet soon, hear MD Lagarde over French case

IMF managing director Christine LagardeThe board of the International Monetary Fund will meet this week to hear IMF managing director Christine Lagarde, who is expected to explain her involvement in a French court case that threatens to tarnish her reputation as well as that of the international lender.

The fund's 24 directors are awaiting details from Lagarde as she returns from Paris, where she was placed under formal investigation for ''negligence'' over a decision she made in 2008 as France's finance minister.

Lagarde, 58, has denied any wrongdoing. She has received public support from the board in previous steps of the legal process.

The board's meeting is tentatively planned for Friday, according to a Bloomberg report citing sources, as the IMF refused to comment officially.

The latest development in a court case that's been going on for more than three years is refocusing unwanted attention on the IMF, already traumatised by the 2011 arrest of Dominique Strauss-Kahn, then the managing director, on charges including the attempted rape of a hotel maid.

Lagarde replaced him; the charges against Strauss-Kahn were later dropped, and he settled the maid's lawsuit in 2012.

In 2008, Lagarde decided to allow an arbitration to end a dispute between Bernard Tapie, a businessman and supporter of then French President Nicolas Sarkozy, and former state-owned bank Credit Lyonnais. The court has been looking into whether she erred in agreeing to the arbitration, which resulted in the business tycoon being awarded about $500 million.

The decision by the Cour de Justice de la Republique to put her under formal investigation, 15 months after naming her a material witness, indicates the case has taken a serious turn.

Most experts however feel the IMF will stand by Legarde, and is unlikely to sack her unless something really serious emerges, which seems unlikely at the moment.