Head of IMF Lagarde faces ‘negligence’ inquiry

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International Monetary Fund chief Christine Lagarde has confirmed she is under official investigation for negligence in a French corruption probe that dates back to her days as finance minister.

In a statement after a fourth round of questioning before magistrates, Ms Lagarde said she was returning to work in Washington later in the day and said the decision was “without basis”.

She and her former chief of staff face questions about their role in a 400 million-euro 
(£318m) payment to a businessman.

The payment was made to Bernard Tapie in a dispute with state-owned bank Credit Lyonnais over the botched sale of sportswear company Adidas.

Critics have said the deal was too generous, and was symptomatic of the cosy relationship between money and power in France. Ms Lagarde said: “After three years of proceedings, dozens of hours of questioning, the court found from the evidence that I committed no offence, and the only allegation is that I was not sufficiently vigilant.”

Under French law, the official investigation is equivalent to preliminary charges, meaning there is reason to suspect an infraction. Investigating judges can later drop a case or issue formal charges and send it to trial.

The court investigating the Tapie payment has been set up specifically for allegations of wrongdoing committed in office. Ms Lagarde’s former chief of staff – now head of the French telecom giant Orange – and Tapie are both under formal investigation for fraud.

Ms Lagarde became French finance minister in 2007, the first woman to hold the post in a G7 country.

The IMF has stood behind its chief, who took over after fellow French politician Dominique Strauss-Kahn was forced to resign amid claims he sexually assaulted a maid in a New York Hotel in 2011. The charges were eventually dropped and he subsequently reached a settlement with the maid.