French authorities searched the Paris apartment of IMF chief Christine Lagarde yesterday in an investigation into her award of a 2008 arbitration payment to a businessman supporter of former president Nicolas Sarkozy, her lawyer said.
Lagarde, who was Sarkozy's finance minister at the time, has denied wrongdoing in ending a court battle with Bernard Tapie and instead opting for arbitration. It resulted in a 285 million euro (HK$2.86 billion) sum being granted to the billionaire.
Although Lagarde has never been accused of profiting personally from the payment, the long-running Tapie affair is a distraction as the ex-lawyer, a major player on the international stage, seeks to restore stability to the global financial system.
Her predecessor at the IMF, Dominique Strauss-Kahn, resigned over sexual assault charges that were later dropped.
Magistrates from a special tribunal that rules on alleged abuses by government ministers suspect her of complicity in misusing public funds after she overruled objections from advisers to proceed with arbitration. The probe has been open since 2011 and Lagarde has never been summoned for questioning.
"This search will help uncover the truth, which will contribute to exonerating my client from any criminal wrongdoing," Lagarde's lawyer, Yves Repiquet, said.
Lagarde was in Frankfurt and not in her Paris flat at the time of the search, which Repiquet said was carried out by magistrates.
An IMF spokesman declined comment but said before Lagarde was appointed, the global lender's board discussed the matter and determined she would be able to lead.
The search comes a day after France's budget minister resigned over a tax fraud inquiry.
Socialist President Francois Hollande came to power last May saying he would create an "exemplary" state free from the unfair advantages accorded the elite he said were rife under Sarkozy.
Sarkozy's ex-labour and foreign ministers resigned in 2010 and 2011, respectively, after allegations of influence peddling.