PARIS: IMF chief Christine Lagarde has arrived at a court in Paris for questioning over a payout to a controversial tycoon during her time as finance minister.
She is being asked to explain her handling of a row in 2007, which resulted in some ¤400m (£342m; $516m) being paid to Bernard Tapie.
According to the British Broadcasting Corporation reports, she is appearing before the Court of Justice of the Republic, which investigates ministerial misconduct.
On Wednesday, she was named by Forbes Magazine as the seventh most powerful woman in the world.
However, on Thursday, Lagarde was summoned to court — her position weakened by an investigation into corruption.
The IMF chief is still one of the most popular politicians on the right in France. People like the idea of a French woman playing such a big role on the world stage.
And after the disgrace that was heaped on the last IMF chief, Dominique Strauss-Kahn, few want to see another prominent French politician embarrassed on the world stage.
Even the Socialist leader in the Assembly, Bruno Le Roux, appeared ambivalent: “I am only concerned for the taxpayers, but it would not be a desirable thing to happen [speaking of a possible formal investigation] – there are important positions within France to defend, notably within the IMF. Lagarde has a great deal of responsibility that she fulfils extremely well.”
Supporters say that while Ms Lagarde is currently in the frame, it’s clearly Nicolas Sarkozy who is being targeted, not necessarily by the judges but by the political class.
If she is put under formal investigation she is not likely to resign from the IMF. In March, the executive board said it supported her and they did appoint her knowing this case was hanging over her.
But some on the right wonder if she could be a future candidate for first female French president.
“It’s a pleasure to see you,” a smiling Lagarde told reporters upon arrival.
She could be placed under formal investigation for the decision to use arbitration, against advice from senior advisers, to settle a long-running court battle between the state and Tapie, a supporter of the then French President, Nicolas Sarkozy.
The case stretches back to 1993 when Mr Tapie, a colourful, controversial character in the French business world, sold his stake in sports company Adidas to Credit Lyonnais, the BBC’s Christian Fraser reports from Paris.
Soon after the bank sold on that stake for Tapie claimed they had defrauded him.
In 2007, President Sarkozy suggested the finance ministry – which had been overseeing the dispute and was led by Ms Lagarde – should move the case to arbitration.
Tapie won a much bigger payout than he might have expected in court.
Lagarde is not accused of profiting from the payout, but she is being questioned over the misuse of public funds.
If she is placed under formal investigation it is of course embarrassing, our correspondent adds. It is a step closer to trial but it does not necessarily mean the case will end up in court, he says.
She is still one of the most popular politicians on the right in France.
And after the disgrace that was heaped on the last IMF chief, Dominique Strauss-Kahn, few in France want to see another prominent French politician embarrassed on the world stage, Christian Fraser says.