IMF Chief Convicted by French Court – Avoids Jail Term

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After a long legal battle, the IMF chief Christine Lagarde was convicted in a negligence case by Court of Justice of the Republic (CJR) but did not hand down a punishment as the Judge Martine Ract ended the proceedings citing her International reputation and fame as one of the main causes of not doing so.

The IMF chief was embroiled in this controversy for a very long time and that she was let off the hook which will bode well for her future career, unlike previous IMF chiefs who were forced to resign after being found guilty.

Her predecessor, Dominque Strauss-Kahn, who was alleged of sexual abuse of hotel staff at New York, resigned in 2011 after which Lagarde was appointed chief of the IMF.

The case stretched back to the early 1990s when Mr. Bernard Tapie wanted to join the Government of Mitterrand and to be eligible for that, he needed to sell off his business interests. His interests included a high number of shares in reputable sportswear company Adidas and as the company was sold under the eye of Credit Lyonnais, a state-owned bank, Mr. Tapie alleged the bank of fraud by undervaluing the firm intentionally and depriving him of his due compensation.

Ms. Lagarde became caught up in this controversy as the French Finance Minister when she ordered arbitration between the two parties back in 2007. The arbitration followed with the court awarding €404m to Mr. Tapie, a decision which became a highly disputed matter and Ms. Lagarde was alleged of trying to help Mr. Tapie in return for the support he showed to then French Prime Minister Nicolas Sarkozy during the elections.

The CJR said in its final decision that it did find Mr. Lagarde guilty of negligence and termed it a bad decision to not go for a review once Mr. Tapie was awarded the compensation, but added that it did not constitute a criminal procedure. The IMF chief, who was not present at the time of the final hearing as she had gone back to Washington D.C, made it out of the matter unscathed and with no criminal record.

She could have been awarded a prison sentence of up to a year and a fine as well had the court gone on to have criminal charges inflicted on her.

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