Managing Director of the International Monetary Fund Christine Lagarde was found guilty of negligence. However, the verdict imposed by the French court has nothing to do with Lagarde’s work as the head of the IMF. The reason for the lawsuit was Lagarde’s actions during her tenure as French Minister of Finance. The court admitted Lagarde's involvement in an illegal payment of a huge compensation to businessman Bernard Tapie.
In 2007, Christine Lagarde formed a private arbitration panel to investigate case on sale of Adidas shares to Credit Lyonnais bank. Tapie, the owner of Adidas sports brand, accused the bank of fraud. As a result, members of the arbitration panel, which were picked by Lagarde, came to the decision to pay a “deceived” businessman Bernard Tapie compensation of 400 million euro using budget funds. The court admitted Christine Lagarde’s guilt. Although the court did not impose a fine or sentence, this verdict is potentially dangerous for Lagarde’s reputation.
IMF officials unanimously stand by their boss. The general opinion of the Board of Directors is as follows: Lagarde’s transgressions occurred when she was not at the fund and since taking charge in 2011, “she had proved to be a leader capable of presenting a softer side of the fund while fighting hard to bolster its legitimacy in the aftermath of the financial crisis”. However, this headline-making case may have caused damage to her most valuable asset, her reputation.
