The glamorous French minister hoping to succeed Dominique Strauss-Kahn as head of the International Monetary Fund was today facing prosecution for financial sleaze.
Christine Lagarde, a 55-year-old former lawyer and synchronised swimmer, is being investigated for abusing her position to help a controversial businessman.
She is said to have awarded some £270million to Bernard Tapie, a convicted football match fixer and tax dodger who supported her governing UMP party.
The allegation comes after Strauss-Kahn’s arrest for the attempted rape of a chambermaid and a range of other sex crimes in a New York hotel.
While former French presidential candidate Strauss-Kahn is on bail and facing up to 25 years in prison, Ms Lagarde has been campaigning to succeed him as IMF head.
But now it has emerged that Ms Lagarde - who was pictured today on holiday in France - could also be facing a trial of her own.
In a scandal which will pile further shame on France’s political class, Paris’s Court of Cassation started an enquiry into Ms Lagarde’s part in the Tapie case last month.
Tapie, former head of Adidas in France, claims he was cheated out of millions by Credit Lyonnais bank when the sports kit empire was sold in 1993.
In 2007, Ms Largarde - whom ITV News economics editor Daisy McAndrew has admitted to a 'crush' on - ended the epic dispute by ordering a panel of judges to arbitrate and, in turn, they awarded Tapie the £270million in damages.
Opposition MPs were furious, with former presidential candidate Francois Bayrou accusing Ms Lagarde of ‘dipping into the the taxpayers’ pocket for a private beneficiary.’
Strauss-Kahn’s Socialist Party also accused Ms Lagarde of improper conduct, pointing to the fact that Tapie was a vocal supporter President Nicolas Sarkozy’s ruling UMP.
Judges will take a decision on whether to prosecute Ms Lagarde on June 10 – at a critical moment in her campaign to succeed Strauss-Kahn at the IMF.
Ms Lagarde's bid for the IMF's top job had been endorsed by the UK's coalition government, which indicated she was preferred to former Labour prime minister Gordon Brown.
The Washington DC-based IMF - which provides loans to countries suffering financial problems - has traditionally been run by a European, while the World Bank has been run by an American.
But shortly before Ms Lagarde indicated her candidacy, major developing nations on the IMF's board issued a joint statement urging an end to that practice.
In a letter to the Financial Times today, influential business academic, Jean-Pierre Lehmann, writes: ‘Christine Lagarde must be presumed innocent until proved otherwise.
'However, the risk that she might have to resign as head of the IMF, were she appointed, pending an official investigation seems an unnecessary one to take.
‘This would be another major blow not only to the IMF but to the whole edifice of global economic governance, which is already suffering from acute problems of legitimacy and credibility.’
Ms Lagarde, who will play a major role in the G8 summit which opens in the French seaside town of Deauville today, denies any wrong-doing.
Ms Lagarde said: ‘If it’s decided to continue with this enquiry it won’t be particularly surprising. Personally, it doesn’t worry me at all.’
She added: ‘I didn’t benefit personally’.
Admitting her 'embarrassing crush', ITV’s Daisy McAndrew wrote: 'She has charisma and leadership skills in buckets… she cuts a dashing figure – a shock of coiffed grey hair and extremely elegant.'
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