French judges begin investigation into IMF chief Christine Lagarde
Magistrates in France on Tuesday formally began a probe which could open the way to a possible criminal investigation into the new French boss of the International Monetary Fund, Christine Lagarde.
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The Court of Justice of the Republic asked three appeal court magistrates to investigate whether Lagarde is guilty of "complicity in forgery" or "complicity in misuse of public funds" or both.
Lagarde categorically denies doing anything illegal, in a case which concerns the huge payment made from public funds to a colourful business tycoon, when she was France's finance minister in 2008.
She is accused of exceeding her authority when she cut short a legal battle between businessman Bernard Tapie and the formerly state-owned bank Crédit Lyonnais, by referring the case to private arbitration.
The arbitrators backed Tapie's claim that he lost money because the bank mishandled the sale of his Adidas sportswear brand, and awarded him compensation.
Tapie was an acquaintance of Lagarde's boss at the time, President Nicolas Sarkozy, and some opposition politicians publicly aired their doubts about the panel's ruling.
The cost to taxpayers of the payment to Tapie was around 400 million euros, although it is understood Tapie himself actually pocketed much less.
If Lagarde is brought to trial and found guilty, she could face 10 years in prison.
The IMF's executive board has expressed confidence in Lagarde, whose predecessor, French politician Dominique Strauss-Kahn resigned after being arrested and accused of attempting to rape a New York hotel maid.
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