Christine Lagarde has arrived at a court in Paris for questioning over a payout to controversial tycoon Bernard Tapie during her time as finance minister.
The IMF chief is being asked to explain her handling of a row in 2007 which resulted in some 400 million euros ($516 million) being paid to Bernard Tapie.
She is appearing before the Court of Justice of the Republic (CJR), which investigates ministerial misconduct.
Christine Lagarde insists the award was the best solution at the time.
“It’s a pleasure to see you,” a smiling she told reporters upon arrival.
Christine Lagarde 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 Bernard Tapie, a supporter of the then French President, Nicolas Sarkozy.
Christine Lagarde has arrived at a court in Paris for questioning over a payout to controversial tycoon Bernard Tapie during her time as finance minister
The case stretches back to 1993 when Bernard Tapie, a colorful, controversial character in the French business world, sold his stake in sports company Adidas to Credit Lyonnais.
Soon after the bank sold on that stake for a much bigger profit, Bernard Tapie claimed they had defrauded him.
In 2007, President Nicolas Sarkozy suggested the finance ministry – which had been overseeing the dispute and was led by Christine Lagarde – should move the case to arbitration.
Bernard Tapie won a much bigger payout than he might have expected in court.
Christine 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. It is a step closer to trial but it does not necessarily mean the case will end up in court.
Christine Lagarde 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.
Some on the right wonder whether she could be a future candidate for first female French president, notably because she has stayed outside the conservative UMP party’s vicious in-fighting.
Christine Lagarde, a perfect English speaker, has never expressed a desire to run for president. But her five-year term at the IMF is due to finish in 2016 – a year before the next presidential election. With her acumen she may be a dangerous opponent for President Francois Hollande.
Frence’s ex-President Nicolas Sarkozy has arrived at a court in Bordeaux to be questioned over allegations he received illegal campaign donations in 2007.
Nicolas Sarkozy is suspected of accepting thousands of euros from L’Oreal heiress Liliane Bettencourt, France’s richest woman.
Police raided his home and offices in July as part of an inquiry ordered by investigating judge Jean-Michel Gentil.
Nicolas Sarkozy, who lost presidential immunity in May, denies all wrongdoing.
Although he has stepped back from frontline politics since his defeat by Socialist challenger Francois Hollande, Nicolas Sarkozy is rumored still to harbor ambitions of running for re-election in 2017.
The outcome of the investigation could determine whether the former president will make his widely anticipated return.
Judge Jean-Michel Gentil is leading the investigation into allegations that staff acting for Lilliane Bettencourt gave 150,000 euros in cash to Nicolas Sarkozy’s aides during his successful 2007 campaign to become president.
Nicolas Sarkozy is suspected of accepting thousands of euros from L’Oreal heiress Liliane Bettencourt, France’s richest woman
Individual campaign contributions in France are limited to 4,600 euros.
Liliane Bettencourt’s former accountant, Claire Thibout, alleges Nicolas Sarkozy’s campaign treasurer at the time – Eric Woerth, who later became budget minister – collected the cash in person.
She also revealed in a leaked police interview that Nicolas Sarkozy, while mayor of Neuilly from 1983 to 2002, paid “regular” visits to the Bettencourt house.
The former president has dismissed as mere gossip claims that he took envelopes stuffed with cash.
Eric Woerth, who was forced to resign as UMP party treasurer in July as a result of the scandal, is already under formal investigation over the 150,000 euro payment allegations.
The allegations surrounding Nicolas Sarkozy and Eric Woerth first surfaced in connection with a trial over the estimated 17 billion euro fortune of Liliane Bettencourt, 87, whose father founded the L’Oreal cosmetics giant.
Both Eric Woerth and Nicolas Sarkozy deny any wrongdoing, as does Liliane Bettencourt.
Bettencourt scandal in dates
November 2012: Nicolas Sarkozy to be questioned about claims Liliane Bettencourt illegally helped finance his 2007 electoral campaign.
July 2012: Police raid Nicolas Sarkozy home and offices after he lost immunity as president
September 2010: French financial police searches the main offices of President Nicolas Sarkozy’s party
July 2010: Liliane Bettencourt’s former accountant, Claire Thibout, alleges Nicolas Sarkozy was one of a number of centre-right politicians to receive regular envelopes of cash
A French secret serviceman acting on the express orders of President Nicolas Sarkozy is suspected of murdering Colonel Muammar al-Gaddafi, it was sensationally claimed today.
He is said to have infiltrated a violent mob mutilating the captured Libyan dictator last year and shot him in the head.
The motive, according to well-placed sources in the North African country, was to stop Gaddafi being interrogated about his highly suspicious links with Nicolas Sarkozy.
Other former western leaders, including ex British Prime Minister Tony Blair, were also extremely close to Gaddafi, visiting him regularly and helping to facilitate multi-million pounds business deals.
Nicolas Sarkozy, who once welcomed Gaddafi as a “brother leader” during a state visit to Paris, was said to have received millions from the Libyan despot to fund his election campaign in 2007.
The conspiracy theory will be of huge concern to Britain which sent RAF jet to bomb Libya last year with the sole intention of “saving civilian lives”.
A United Nations mandate which sanctioned the attack expressly stated that the western allies could not interfere in the internal politics of the country.
Instead the almost daily bombing runs ended with Gaddafi’s overthrow, while both French and British military ‘advisors’ were said to have assisted on the ground.
Now Mahmoud Jibril, who served as interim Prime Minister following Gaddafi’s overthrow, told Egyptian TV: “It was a foreign agent who mixed with the revolutionary brigades to kill Gaddafi.”
Diplomatic sources in Tripoli, the Libyan capital, meanwhile suggested to the Italian newspaper Corriere della Serra that a foreign assassin was likely to have been French.
The paper writes: “Since the beginning of NATO support for the revolution, strongly backed by the government of Nicolas Sarkozy, Gaddafi openly threatened to reveal details of his relationship with the former president of France, including the millions of dollars paid to finance his candidacy at the 2007 elections.”
One Tripoli source said: “Sarkozy had every reason to try to silence the Colonel and as quickly as possible.”
The view is supported by information gathered by investigators in Benghazi, Libya’s second city and the place where the “Arab Spring” revolution against Gaddafi started in early 2011.
Rami El Obeidi, the former head of foreign relations for the Libyan transitional council, said he knew that Gaddafi had been tracked through his satellite telecommunications system as he talked to Bashar Al-Assad, the Syrian dictator.
NATO experts were able to trace the communications traffic between the two Arab leaders, and so pinpoint Gaddafi to the city of Sirte, where he was murdered on October 20 2011.
NATO jets shot up Gaddafi’s convoy, before rebels on the ground dragged Gaddafi from a drain where he was hiding and then subjected him to a violent attack which was videoed.
In another sinister twist to the story, a 22-year-old who was among the group which attacked Gaddafi and who frequently brandished the gun said to have killed him, died in Paris last Monday.
Ben Omran Shaaban was said to have been beaten up himself by Gaddafi loyalists in July, before being shot twice. He was flown to France for treatment, but died of his injuries in hospital.
Nicolas Sarkozy, who lost the presidential election in May, has continually denied receiving money from Gaddafi.
Today he is facing a number of enquiries into alleged financial irregularities.