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IMF chief’s job safe despite criminal probe

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Summary of story on France24, August 5, 2011

An inquiry into Christine Lagarde’s actions as French finance minister will not affect her recent appointment as chief of the International Monetary Fund (IMF), according to lawyers.

Lagarde is being investigated in France amid allegations of abuse of power when she intervened in a legal battle between media mogul Bernard Tapie and the former state owned bank Crédit Lyonnais in 2008.

Lagarde, French finance minister at the time, ordered that the case be settled out of court and as a result Tapie was awarded a settlement of 285 million euros. Suspicions were raised due to Tapie’s links with President Nicolas Sarkozy, who had taken office a few months earlier.

The Court of Justice of the Republic (CJR) announced yesterday that it will now investigate Lagarde for “abuse of authority”. If charged, she could face up to 10 years in prison and a fine of up to €150,000.

The IMF board were fully aware of the situation at the time of her appointment, and announced that they were “confident that she will be able to effectively carry out her duties as managing director” after the investigation was confirmed.

The investigation will begin imminently but it is expected to take years to reach a conclusion due to the complex legal subtleties involved.

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