By LK Hewlett WINN From Caribbean News Now

PARIS, France (WINN) — The first female managing director of the International Monetary Fund (IMF), Christine Lagarde, went on trial on Monday in a French court for alleged misuse of public funds.

The charge of negligence stems from a €425 million payment to a French businessman in a 2008 lawsuit settlement against the state when she was France’s finance minister.

Lagarde was elected to the top post in the IMF in 2011 after then managing director Dominique Strauss-Kahn resigned in the face of a sex scandal.

French media has quoted Lagarde as saying she is confident she will be vindicated. She denies acting improperly by authorizing the hefty payout.

According to French 2 Television, the IMF chief said, “Negligence is a non-intentional offence. I think we are all a bit negligent sometimes in our life.”

French radio station Europe 1 reported on Monday that Lagarde’s attorney, Patrick Maisonneuve, would seek a postponement when the proceedings open on the basis that it doesn’t make sense for Lagarde to go on trial while a separate investigation in the case is still underway.

If found guilty, Lagarde could be sentenced to up to one year’s imprisonment.

While the IMF has said its executive board retains confidence in Lagarde’s ability to lead the international organization, the outcome of the matter could have serious implications for the IMF’s leadership.

For more on this story go to: http://www.caribbeannewsnow.com/topstory-IMF-chief-Lagarde-goes-on-trial-32841.html </s> Christine Lagarde, the managing director of the International Monetary Fund (IMF), was found guilty yesterday 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, reported the New York Times.

Ms. Lagarde, who began her second five-year term at the IMF in February, faces a fine of up to 15,000 euros, or $15,700, and up to one year in jail.

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.

The move is likely to destabilise the IMF while it faces a host of thorny issues, including questions over its participation in a multibillion-dollar bailout for Greece and uncertainty about the United States’ role in the organisation once Donald J. Trump becomes president in January.

The IMF board had also been preparing for a possible conviction with people close to major shareholders, saying that in the absence of a prison term — and with continuing support from the French government — Ms Lagarde would probably be able to stay in her position.

The IMF said in a statement after the verdict that the board, which has met previously to consider the case, was expected to “meet again shortly to consider the most recent developments”. </s> Christine Lagarde looked to be safe in her role as the International Monetary Fund’s managing director on Monday night after its board gave her its backing, just hours after she was convicted of “negligence” over a huge payout to a business tycoon while she was French finance minister.

The IMF board praised the “wide respect and trust” for Mrs Lagarde’s leadership as it expressed its “full confidence” in her ability to continue in the role at the upper echelons of international finance.

France’s Court of Justice of the Republic, a special tribunal for ministers, earlier chose not to punish Mrs Lagarde or give her a criminal record. She had faced a one-year term and a €15,000 (£13,000) fine, threatening to derail her career.

Mrs Lagarde, who has maintained her innocence throughout the process, said she was “not satisfied” with the verdict but would not appeal against the decision. “There is a point in time when one has to just stop, turn the page and move on, and continue to work with those who have put their trust in me,” she said.

The ruling came after a week-long trial in which she received a rough ride. Ms Lagarde had maintained her innocence, and the prosecutor had asked for an acquittal over the "very weak" case after advising against bringing it to court in the first place.

Proceedings centred on Ms Lagarde's 2007 decision to allow a dispute over flamboyant magnate Bernard Tapie's sale of the Adidas sports brand to Credit Lyonnais bank to be resolved by a rarely-used private arbitration panel, instead of through the courts. </s> The International Monetary Fund chief Christine Lagarde kept her job and escaped punishment on Monday despite a conviction on negligence charges by French judges over a state payout made while she served as France’s finance minister in 2008.

The Washington-based IMF executive board reaffirmed its full confidence in Lagarde’s abilities to perform her duties leading the Fund, hours after the verdict was issued in Paris.

“The Executive Board looks forward to continuing to work with the Managing Director to address the difficult challenges facing the global economy,” the board said in a statement.

In Monday’s ruling, the judges did not find negligence in Lagarde’s decision to seek an out-of-court settlement with tycoon Bernard Tapie. But they said her failure to contest the award to him of about 400 million euros ($417 million) was negligent and led to a misuse of public funds.

“The context of the global financial crisis in which Madame Lagarde found herself in should be taken into account,” Martine Ract Madoux, the main judge on the case, said in explaining the absence of any sentence.

She also cited Lagarde’s good reputation and international standing as reasons why the court did not order a punishment. The charge against Lagarde could have carried a sentence of up to a year in prison.

Lagarde, whom IMF members reappointed in February, has won respect from global finance leaders for pushing governments to do more to boost economic growth and helping to include China’s yuan in the fund’s currency basket.

Lagarde’s lawyer, Patrick Maisonneuve, said immediately after the ruling that his team would look into appealing the decision. Though an appeal could clear her name, it could also turn out worse for Lagarde.

“Since Madame Lagarde was not sentenced, I wonder about whether to appeal or not to the highest court,” Maisonneuve told reporters outside the court.

Lagarde, who described the case as a five-year ordeal, argued in the trial last week that she had acted in good faith, and with the public interest in mind.

She said she had signed off on the arbitration – against the advice of some Finance Ministry officials – to end a costly 15-year-old legal battle between the government and Tapie, a supporter of then-President Nicolas Sarkozy.

The case dates back to when Tapie sued the French state for compensation after selling his stake in sports company Adidas to then state-owned Credit Lyonnais in 1993.

He accused the bank of defrauding him after it resold its stake for a much higher price. With the case stuck in the courts, the two sides agreed to a private settlement and Tapie was awarded a 403 million euro payout, including interest and damages.

The case was only the fifth ever heard by a special French court created in 1993 to try government ministers. The court of 15 judges, including 12 lawmakers, has never handed down a firm prison sentence. </s> Christine Lagarde will remain head of the International Monetary Fund despite being convicted of negligence in a case dating to her tenure as France’s finance minister.

The IMF’s executive board said it had “full confidence” in Lagarde’s ability to carry out her duties at the head of the Washington-based international lending agency.

After a week-long trial, France’s Court of Justice of the Republic on Monday found Lagarde guilty of one count of negligence but spared her jail time and a criminal record.

The 60-year-old IMF leader had potentially faced a year of imprisonment and a fine for not seeking to block a fraudulent 2008 arbitration award to a politically connected tycoon when she was finance minister.

Lagarde thanked the board for the vote of confidence “in my ability to do my job”. She said she would not appeal against the French court’s decision.

“I am not satisfied with it, but there’s a point in time when one must stop, turn the page and move on,” she said.

Lagarde, a lawyer, became France’s first female finance minister in 2007, overseeing the country’s response to the financial crisis that rocked the global economy from 2008. She is also the first woman to head the IMF.

“She is a strong leader,” US Treasury Secretary Jacob Lew said after the board’s decision. “And we have every confidence in her ability to guide the fund at a critical time for the global economy.”

The Court of Justice of the Republic is a special tribunal to hear cases of alleged criminality by ministers in office and is made up of three judges and 12 parliamentarians.

It ruled that Lagarde’s negligence in her management of a long-running arbitration case involving tycoon Bernard Tapie helped open the door for the fraudulent misappropriation of public funds. Lagarde herself was not accused of fraud.

The case revolves around a 403 million-euro (£337 million) arbitration award given to Mr Tapie in 2008 over the botched sale of sportswear giant Adidas in the 1990s.

Civil courts have since quashed the unusually generous award, declared the arbitration process and deal fraudulent and ordered Mr Tapie to refund the money.

The special court’s presiding judge, in reading the verdict, said Lagarde should have asked her aides and others for more information about the “shocking arbitration award”.

In deciding not to sentence Lagarde, the court noted that the award to Mr Tapie has since been annulled, sparing damage to the public purse. It also noted that Lagarde was busy at the time with the global economic crisis.

Lagarde’s “personality and national and international reputation” also counted in her favor in the decision not to punish her, the court ruled.

Lagarde, who was not present for the verdict, maintained her innocence through the trial. The prosecutor had asked for an acquittal in the case, which began in 2011.

The special court acquitted Lagarde of negligence in her original decision to put the Tapie case to arbitration. But it found her guilty in a subsequent decision not to contest the amount of the arbitration award.

The legal battle between Mr Tapie and Credit Lyonnais over the public bank’s sale of his Adidas stake was still unresolved when Lagarde took over at the Finance Ministry in 2007.

Lagarde ordered that the dispute be settled through a private arbitration panel, instead of regular courts. The massive award raised questions about whether Mr Tapie benefited from his political connections, including with then-President Nicolas Sarkozy, Lagarde’s boss when she was his finance minister. </s> IMF head Christine Lagarde was on Monday found guilty of negligence by a French court over a massive payout to a tycoon when she was finance minister, but will not be fined or face prison.

Ms Lagarde was found to be at fault for failing to challenge a 404-million-euro ($422 million) compensation payout to businessman Bernard Tapie over the sale of the Adidas sports brand to Credit Lyonnais bank.

Ms Lagarde, who was France’s finance minister between 2007 and 2011, was not in the Paris court to hear the decision because she is in Washington, where the International Monetary Fund is based, her lawyer said.

The 60-year-old was tried by the Court of Justice of the Republic, a tribunal staffed by judges and members of parliament that hears cases against French ministers accused of wrongdoing in office.

In Washington, an IMF spokesman said the agency’s board would meet shortly to discuss the verdict. </s> PARIS — Christine Lagarde, the managing director of the International Monetary Fund, went on trial in Paris on Monday, facing criminal charges that when she was France’s finance minister, her negligence resulted in the misuse of hundreds of millions of euros in public money.

The trial caps a long-running legal drama that has overshadowed her role at the agency, captivated and irritated the French public, and exposed ties between powerful politicians and the wealthy. It has also compelled Ms. Lagarde to defend herself repeatedly since taking over at the I.M.F. in 2011, when another former French finance minister, Dominique Strauss-Kahn, resigned after being accused of sexually assaulting a maid in a New York City hotel.

Ms. Lagarde is accused of “negligence by a person in a position of public authority” in overseeing a politically charged arbitration case in 2007. In the case, Bernard Tapie, a flamboyant French tycoon close to Nicolas Sarkozy, then France’s president, was awarded more than 400 million euros, or $430 million, to settle a dispute with the partly state-owned bank Crédit Lyonnais.

Her lawyer appealed for a postponement, but the court — which is hearing the case in the same courtroom where the French queen Marie-Antoinette was tried — denied the request. The trial is scheduled to run through Dec. 20 but could conclude earlier. </s> Managing Director of the International Monetary Fund (IMF) Christine Lagarde stands near her lawyer Patrick Maisonneuve (L) before the start of her trial about a state payout in 2008 to a French businessman, at the courts in Paris, France, December 12, 2016. © Charles Platiau / Reuters

International Monetary Fund head, Christine Lagarde, has appeared before court on Monday in Paris, facing negligence charges over allowing a handout of $425 billion to a French tycoon, while being the country’s finance minister in 2008.

Lagarde was described by AP as being “poised and serious” as she went on trial at the Court of Justice of the Republic, intended for proceedings against government ministers.

She took notes as judge summed up the case which was launched back in 2011, a month after Lagarde became the IMF president.

The 60-year-old had to declare her identity, age, address, professional activity and salary in court and confirmed that she was earning $450,000 a year.

According to Lagarde, she is taking time off her day job at the International Monetary Fund to face trial.

Her lawyer, Patrick Maisonneuve, asked for a delay in the proceedings, stating that it is unreasonable for Lagarde to face trial when a separate investigation in the broader case is still under way.

If the lawyer’s appeal is not satisfied by the judge the trial against the IMF chief is due to conclude on December 20.

Lagarde, who faces up to a year in prison if found guilty, denies any wrongdoing.

“Negligence is a non-intentional offense. I think we are all a bit negligent sometimes in our life. I have done my job as well as I could, within the limits of what I knew,” she told France 2 television on Sunday.

Back in 2008, Lagarde as a French finance minister approved a handout of 403 million euro ($425 million) to tycoon, Bernard Tapie, in an arbitration deal in 2008 over the sale of Adidas sportswear maker.

The investigation, which was launched due to an unusually high award, came to a conclusion that the whole affair was rigged in favor of Tapie, who had connections in the highest circles of French society, including then-President Nicolas Sarkozy.

Lagarde is accused of serious negligence “not only from a questionable carelessness and precipitation, but also from a conjunction of faults which, by their nature, number and seriousness, exceed the level of mere negligence,” the judges wrote after the investigation concluded.

Lawyer Maisonneuve told Europe-1 radio that Lagarde as a government minister was simply following instructions from her administration, having no time to read all 15 years of legal files in the Adidas case.

In an ongoing separate criminal investigation into the case, Tapie and several other high-ranked players, including current Orange CEO, Stephane Richard, were given criminal charges of gang-related fraud.

The trial and a potential prison term may put Lagarde’s future as IMF chief in question. Her predecessor, another Frenchman, Dominique Strauss-Kahn, was forced to resign in 2011 amid allegations of sexual assault. </s> Christine Lagarde, the head of the International Monetary Fund, was negligent in her handling of a long-running fraud case, a French court has ruled.

A special court made up of members of parliament and magistrates announced the guilty verdict on Monday in Paris. But it also said Lagarde won't be fined, serve any jail time, or receive a criminal record.

Speaking on French TV, Lagarde's lawyer Patrick Maisonneuve described the unusual ruling and absence of a sentence as a partial acquittal, but said she may appeal.

The IMF's executive board, which has been supportive of Lagarde throughout the case, stood by her in the wake of the verdict. The board said in a statement Monday that it "reaffirms its full confidence in the managing director's ability to continue to effectively carry out her duties."

The IMF is in charge of maintaining financial stability around the world. Lagarde has played a pivotal role in IMF-backed rescues of countries on the brink of collapse, including Greece and Ukraine.

Lagarde had been accused of giving preferential treatment to businessman-turned-politician Bernard Tapie as he pursued a legal challenge against the French government. At the time, Lagarde was the French economy minister.

Tapie eventually won his case and was awarded €293 million ($306 million), plus interest. Lagarde was found to be negligent for not challenging the award of such a large sum of taxpayers' money.

She was not in court for the verdict. Her lawyer said she was in Washington for work.

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Lagarde is the third IMF managing director in a row to face legal proceedings. Her predecessor, Dominique Strauss-Kahn, resigned from the IMF in 2011 after sexual assault charges were brought in the U.S. (They were subsequently dropped.)

And Rodrigo Rato, who preceded him in the job, is currently on trial on corruption charges in Spain.

Unraveling the case

The case has its roots in the early 1990s when Tapie joined the French government and sold his stake in Adidas (ADDYY) to avoid accusations of a conflict of interest.

He instructed Credit Lyonnais to handle the sale for him. The bank sold Adidas for just under €318 million ($332 million) the following year to a group of buyers, including a subsidiary of Credit Lyonnais. A year later, Adidas was sold again, this time for €533 million, netting the bank a large profit.

Tapie sued, claiming he'd been defrauded. By the time the case came to court, Credit Lyonnais was collapsing and the French state had taken over its liabilities. So Tapie pursued his claim against the government for a decade until a court awarded him €135 million in damages.

That ruling was overturned on appeal. But rather than leave Tapie to fight on in court, Lagarde decided to refer the matter to arbitration. A special panel of judges awarded Tapie €293 million, plus interest, just months later.

-- Jim Bittermann and Océane Cornevin contributed reporting.
A court in Paris finds International Monetary Fund Managing Director Christine Lagarde guilty of negligence in a 404 million euro "misuse of public funds" case. The court ruled that Lagarde won't be fined, won't serve any jail time, or receive a criminal record. The IMF Executive Board "looks forward to continuing to work with" her.