Christine Lagarde, the head of the International Monetary Fund, has gone on trial accused of negligence over a €400m (£335m) payment made to a French tycoon while she was the country’s finance minister.

Lagarde approved the payment from public funds to the businessman Bernard Tapie, who was a friend of the then president, Nicolas Sarkozy.



This “negligence by a person in a position of public authority” constituted a misuse of public funds, according to prosecutors.



Lagarde, who arrived for the hearing shortly before 2pm, faces up to a year in jail and a €15,000 fine if convicted.

The president of the court asked Lagarde how she intended to defend herself and if she wished to exercise her right to remain silent. “I have no intention of keeping silent, madame la presidente,” Lagarde replied.

In a declaration to the court, Lagarde said that she “finally hope[d] to show that I am not in any way guilty of negligence but that I acted with conscience ... and my only aim was the public interest”.

“Was I negligent?” she said. “No, and allegation by allegation, I will attempt to convince you of this.” Lagarde said she was “profoundly shocked” by the “aggression” of the investigators.



Speaking earlier on Monday, Lagarde, 60, said she was confident she had done nothing wrong. She denied she had shown Tapie favourable treatment or awarded the controversial payout on Sarkozy’s orders.

“Negligence is a non-intentional offence. I think we are all a bit negligent sometimes in our life. I have done my job as well as I could, within the limits of what I knew,” Lagarde told France 2 television.

The court’s inquiry commission claims Lagarde entered into a “badly prepared, ill framed and unwelcome decision to go to arbitration” in the long-running Tapie case in defiance of official advice.

It also laments that Lagarde failed to appeal against the massive payout and criticised her for acting “carelessly and hastily”. The inquiry conclusion was damning, accusing Lagarde of a “conjunction of errors that, by their nature, number and seriousness go beyond the level of simple negligence”.

In Lagarde’s defence it noted that certain elements in the case had preceded her appointment to the finance ministry, and that she had no “personal relation” with the key figure in the case, namely Tapie.

Twelve witnesses will give evidence – eight for the prosecution and four for the defence.

Lagarde will argue that she was not given all the information by her ministerial chief of staff, Stéphane Richard, now chairman of the Orange telecoms company. Richard, who is under investigation for “organised fraud and misuse of public funds”, has been accused of not showing Lagarde “essential” documents from a state committee that advised against sending the case to private arbitration.

Richard denies wrongdoing.

Lagarde said: “I didn’t read all the notes, and my office was there precisely in order to filter them.” She added: “Was I abused, if so by whom? Perhaps we will know one day.” She reminded the court that she had asked the IMF’s board of directors to waive her immunity from prosecution.

Lagarde, who was finance minister from 2007 to 2011, when she became the IMF’s managing director, has repeatedly denied wrongdoing.



Tapie, the former owner of the Olympique de Marseilles football club and a former pop and television star, was awarded the money in a two-decade legal wrangle with the French public bank Crédit Lyonnais (CL). He accused the bank of undervaluing his majority stake in Adidas at a time when the CL was partly state-owned.



Lagarde took the unusual step of referring the case to private arbitration and making an out-of-court settlement, which caused a public outcry. Detectives have been looking into whether Tapie was offered a deal in return for supporting Sarkozy’s successful 2007 presidential bid.

A Paris appeal court has ordered Tapie to reimburse the money, but he has appealed against the ruling and the case is continuing.



Tapie, his lawyer, the arbitration judge who approved the award, and Richard are among six people under investigation for alleged group fraud and misuse of public funds.

Lagarde’s lawyers have asked for her hearing to be suspended until the investigation into Tapie and the others has finished.

Richard’s lawyer has said the accusations against him are “libellous, grotesque ... and not based on any serious evidence”.

In September 2015, the French government recommended the case against Lagarde should be dropped, but judges insisted on a trial.

The case is being heard at the Cour de Justice de la République, a special court set up to judge ministers and public officials for crimes allegedly committed while in office. It is made up of three judges and 12 politicians from the French houses of parliament.



It is only the fifth time the court has been convened. The case is expected to last until 20 December. Lagarde has officially taken a break from the IMF during the trial, but her team in the US said she was still in contact and working.



Dramatis personae



Christine Lagarde, 60, appointed finance minister by Nicolas Sarkozy in 2007. The former synchronised swimming champion went to Washington as a political intern on Capitol Hill after her baccalaureate, then returned to France, studied law and joined a Chicago-based international law firm. She was appointed head of the IMF in 2011. Lagarde was described by a leading US economist as a “rock star” of the finance world. She says women in high places are essential: “There should never be too much testosterone in one room.”

Nicolas Sarkozy, 61, former French president who was hoping to win a second term in office before his humiliating defeat in the centre-right Les Républicains primary race last month. Sarkozy appointed Lagarde finance minister after becoming president in 2007 and damned her with faint praise, saying she had “many qualities … and a predictable personality”. Sarkozy has been friends with tycoon Bernard Tapie since the 1980s.

Bernard Tapie, 73, is a businessman, former government minister, one-time actor, singer, TV host and football club owner, who spent eight months in jail for match-fixing and tax fraud. Described as France’s answer to Donald Trump, he made his fortune acquiring and reviving bankrupt companies including Adidas, which he turned around. But he was forced to sell his company shares after being appointed a government minister in 1992.

Stéphane Richard, 55, is chairman of the multinational telecommunications company Orange, in which the French state is majority shareholder. He was Lagarde’s chief of staff at the economy ministry. In 2013 he was officially put under investigation for “organised fraud” in relation to the private arbitration that awarded Tapie €403m. He denies the accusations.