IMF has confidence in Lagarde despite French case

The IMF said Thursday said it remains confident in Managing Director Christine Lagarde despite a French probe into her handling of a high-profile scandal when she was a government minister.

"It would not be appropriate to comment on a case that has been and that is currently before the French judiciary," International Monetary Fund spokesman Gerry Rice told reporters in a briefing.

However, he added, "the executive board has been briefed on this matter, including recently, and continues to express its confidence in the managing director's ability to effectively carry out her duties."

On March 20, French police raided Lagarde's Paris home in connection with the investigation into her decision in 2007, when she was minister in charge of the economy, to ask an arbitration panel to rule on a dispute between disgraced tycoon Bernard Tapie and the collapsed bank Credit Lyonnais.

The arbitration resulted in Tapie being awarded around 400 million euros ($510 million).

That outcome triggered outrage among critics who insisted the state should never have taken the risk of being forced to pay money to Tapie, a convicted criminal.

The CJR, a French court established to assess potentially suspect actions by government ministers, deemed Lagarde's decision to send the Tapie case to arbitration "questionable" and has suggested that she was complicit in a process characterized by "numerous anomalies and irregularities."

Lagarde's lawyer Yves Repiquet told AFP after the raid that his client was cooperating with the investigation.

"Mrs Lagarde has nothing to hide," he said.

Lagarde herself has said that the decision to send the Tapie case to arbitration was "the best solution at the time."

Lagarde, 57, was chosen to lead the IMF in 2011 after her predecessor, ex-French politician Dominique Strauss-Kahn, was forced to resign after being arrested in New York in a scandal involving sex with a hotel chambermaid.