Police raid IMF chief Christine Lagarde’s flat

French police raid IMF chief Christine Lagarde’s flat in Bernard Tapie probe.

French authorities have searched the Paris flat of IMF chief Christine Lagarde as part of an investigation into her handling of a 2008 compensation payment to a businessman supporter of ex-president Nicolas Sarkozy, her lawyer said.

Police are investigating claims that Lagarde, when French Finance Minister under Nicolas Sarkozy, acted illegally in approving the €285m arbitration payout to Bernard Tapie.

Lagarde denies any wrongdoing.

“This search will help uncover the truth, which will contribute to exonerating my client from any criminal wrongdoing,” Lagarde’s lawyer, Yves Repiquet, told Reuters.

Ms. Lagarde confirmed the decision in a statement but said it was “without basis,” adding she would challenge it with a higher court. She said she was heading back to Washington Wednesday and would brief the IMF board about the latest development.

The investigation is part of a complex, drawn-out probe into the alleged misuse of state funds. The case stems from a decision in the 2008 to use arbitration to settle a dispute with business tycoon Bernard Tapie. The arbitration panel awarded €420 million to Mr. Tapie.

IMF issued a statement after Managing Director Christine Lagarde put under formal investigation for her role in an arbitration case during her time as French finance minister.

IMF spokesman Gerry Rice: “She is now on her way back to Washington and will, of course, brief the board as soon as possible. Until then, we have no further comment”

Source: WSJ/Bloomberg