International Monetary Fund chief Christine Lagarde,was questioned by the French police in relation to a graft case during her time as Finance minister under President Nicolas Sarkozy.

Lagarde said in a statement, Wednesday, through her lawyer that she was being investigated for "simple negligence," by the Court of Justice of the Republic, the judicial body that is charged with investigating the conduct of high government officials, reports the New York Post.

The IMF chief was grilled by a special court in Paris for the fourth time. "The investigating commission of the court of justice of the French Republic has decided to place me under formal investigation," she said to AFP.

"I have instructed my lawyer to appeal this decision which I consider totally without merit. I return back to Washington where I will indeed brief my board, " she added

Lagarde also said that she had no intention of resigning from her post as chief of IMF.

Being placed under investigation by a court in France is as good as being charged for misconduct but it does not mean the case will necessarily go to trial, say media reports.

The investigation is about an alleged payout of 403 million euros or $527-million to tycoon Bernard Tapie in 2008 to settle a dispute with now defunct, state-owned bank Credit Lyonnais. The dispute was about the 1993 sale of Adidas sportswear brand, which Tapie said the bank grossly undervalued and held the state responsible and wanted it to compensate him.

The dispute was referred to a three-member panel by Lagarde, which ruled in favor of Tapie. It is suspected that he received favorable treatment as he was a friend and supporter of then President Sarkozy.

Lagarde took over as chief of IMF in 2011 when her predecessor, Dominique Strauss-Kahn, left in disgrace amid sexual assault charges.