French court delays ruling on IMF’s Lagarde

A French court on Friday delayed its ruling on whether the new head of the IMF, former French finance minister Christine Lagarde, will face a criminal probe over her handling of a tycoon's lawsuit.

French court delays ruling on IMF's Lagarde
MEDEF (File)

The Court of Justice of the Republic, which is charged with deciding whether ministers can be investigated over alleged offences committed in office, said it had pushed back its much-anticipated decision until August 4th.

A statement from the court said simply that one of its members had “belatedly” decided to recuse himself from the case, delaying proceedings.

It had been due to rule on Friday, just three days after Lagarde took up her new responsibilities at the International Monetary Fund, the world’s lender of last resort and a pillar of global financial governance.

The IMF board chose Lagarde for the job despite allegations that she abused her authority in cutting short a legal battle between tycoon Bernard Tapie and his bank and sending the parties into binding arbitration.

The arbitration panel eventually decided the businessman should be paid 385 million euros from the public purse in damages and interest after the alleged mishandling by Credit Lyonnais of the sale of his sportswear brand Adidas.

Credit Lyonnais was state-run at the time of disputed transaction, and its debts were later collected under the CDR — a “bad bank” set up and run by the state to regroup the group’s disputed and bad debts.

As such, the damages and interest owed to Tapie, of which he has reportedly already received around 200 million euros, have had to come from the public purse, triggering public anger at a time of economic austerity.

Lagarde’s political opponents have criticised the decision to cut short the legal battle between the CDR and Tapie, an acquaintance of President Nicolas Sarkozy, and prosecutors allege she may have exceeded her powers.

Last month, judicial sources told AFP that prosecutors have begun a second inquiry into whether the head of the CDR concealed information relevant to the arbitration from his own board.

Lagarde is not personally targeted in this second inquiry, but the official was under her ministry’s authority and the investigation has only added to the climate of suspicion surrounding her handling of the Tapie case.

Officials in Lagarde’s office, speaking on condition of anonymity, last month dismissed the latest allegations as a rehash of a report on a news website earlier this month “with the same errors and inaccuracies”.

She, meanwhile, insists she herself did nothing wrong in taking a decision she said saved time and public money by halting a lengthy legal battle.

Lagarde, a 55-year-old former corporate lawyer, took up the Washington post at the IMF to replace the previous French leader of the institution, economist and Socialist politician Dominique Strauss-Kahn.

Strauss-Kahn was forced to resign when he was arrested after being accused of sexual assault by a New York hotel maid. His trial continues, despite the prosecution admitting to doubts about the alleged victim’s testimony.

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Ghosn trial may be delayed until next year: Japanese media

Former Nissan chief Carlos Ghosn's trial, which was expected to begin in September, will be delayed, local media said Saturday, hinting that it may not start this year.

Ghosn trial may be delayed until next year: Japanese media
Former Nissan chief Carlos Ghosn leaving a detention centre on Thursday. Photo: Behrouz Mehri / AFP
The 65-year-old tycoon, currently on bail, is preparing for his trial on four charges of financial misconduct ranging from concealing part of his salary from shareholders to syphoning off Nissan funds for his personal use.
The Tokyo District Court had proposed to start his trial in September during its pre-trial meetings with his defence lawyers and prosecutors, news reports said, quoting unnamed sources.
But the court told the lawyers and prosecutors on Friday that it had retracted the plan without proposing a new time frame, Kyodo News said, adding that the move could mean the trial will not start this year.
The court also decided not to separate the trial for Ghosn, his close aide Greg Kelly and Nissan — all indicted on the charge of violating the financial instruments law by underreporting Ghosn's compensation, according to Kyodo.
His lawyers have so far demanded he be tried separately from Nissan and have voiced fears he will not receive a fair trial.
The Sankei Shimbun also said prosecutors gave up filing an appeal to the Supreme Court against his bail, a move to erasing a chance of his return to jail unless he is arrested again on fresh charges. Immediate confirmation of the news reports was not available.
On Thursday, Ghosn exited his Tokyo detention centre after accepting bail of $4.5 million under strict conditions, including restrictions on seeing his wife.
His case has captivated Japan and the business community with its multiple twists and turns, as well as shone a spotlight on the Japanese justice system which critics say is overly harsh.
Ghosn denies all the charges, with a spokesperson for the executive saying on Monday he would “vigorously defend himself against these baseless accusations and fully expects to be vindicated”.
In a statement hours after his release, Ghosn said: “No person should ever be indefinitely held in solitary confinement for the purpose of being forced into making a confession.”
The dramatic case has thrown international attention onto the Japanese justice system, derided by critics as “hostage justice” as it allows prolonged detention and relies heavily on suspects' confessions.