Christine Lagarde, the head of the International Monetary Fund, began being grilled at a French court on Thursday in connection with a 400 million euro fraud involving former businessman Bernard Tapie.
Mrs. Lagarde is accused of allowing the huge payout to Mr Tapie, a vocal supporter of the UMP party of former French President Nicolas Sarkozy, when she was France’s Finance Minister.
The leader of the IMF allegedly dipped “into the pockets of French taxpayers” to repay Mr Tapie after a long legal dispute between him and French bank Credit Lyonnais.
The French entrepreneur, who was jailed for match-fixing when he was the owner of soccer team Olympique Marseille, claimed he “was cheated out of millions” by the bank when Adidas was sold in 1993.
At the time, Mr Tapie was the head of the French branch of the sportswear company. A panel set up by Mrs. Lagarde in 2007 ruled in favor of Mr. Tapie the following year. He was awarded a 4oo million euro payout.
Judges in the Court of Justice of the Republic in Paris claim she abused her government position by authorising the payment. Mrs. Lagarde could be sentenced to a maximum of 10 years in jail after she is placed under investigation. The hearings could last up to two days.