IMF boss Christine Lagarde put under investigation in French fraud case

IMF chief Christine Lagarde says she will appeal against a decision to place her under investigation. Photo: Reuters

Paris: IMF chief Christine Lagarde has been placed under formal investigation by French magistrates for her alleged role in a long-running political fraud case, a source close to the former French finance minister said.

The source said Ms Lagarde, who was earlier questioned by magistrates in Paris under her existing status as a witness, considered their decision to investigate her for alleged 'negligence' was unfounded and would appeal it. A French judiciary source also confirmed the step.

In French law, magistrates place someone under formal investigation when they believe there are indications of wrongdoing, but that does not always lead to a trial.

The inquiry into tycoon Bernard Tapie has embroiled several of former president Nicolas Sarkozy's cabinet members including Ms Lagarde.

Mr Tapie - who supported Mr Sarkozy in the last two elections - was awarded €403 million in a 2008 arbitration payment under Mr Sarkozy's presidency to settle a dispute with the now defunct, state-owned bank Credit Lyonnais over a 1993 share sale. Ms Lagarde was finance minister at the time.

Reuters