PARIS, (Reuters) – French magistrates decided yesterday not to place IMF chief Christine Lagarde under formal investigation over her role in a 285-million-euro ($368.5 million) arbitration payment made to a supporter of former president Nicolas Sarkozy.
Lagarde instead was given the status of a “supervised witness” after two full days of questioning on her 2008 decision as Sarkozy’s finance minister to use arbitration to settle a legal battle between the state and businessman Bernard Tapie.
The decision removes a headache for Lagarde, the only French national heading a major international institution today, and for the International Monetary Fund (IMF), for which a formal investigation of her would have been highly embarrassing.
Emerging from a Paris court late last evening, a composed-looking Lagarde read from a statement asserting that she had not acted against the public interest.
“My explanations answered questions raised about the decisions that I had made at the time,” she told reporters. “My status as a supervised witness is not a surprise for me because I always acted in the interest of the state and according to the law.”
She added: “Now, it’s time for me to go back to work in Washington, and I will of course be briefing my board.”
The status of supervised witness means that in any future hearings, Lagarde would answer questions as a witness accompanied by a lawyer.
