French court holds IMF chief Christine Lagarde guilty in arbitration case

FILE - In this Oct. 8, 2016 file photo, International Monetary Fund (IMF) Managing Director Christine Lagarde speaks during a news conference in Washington. On Monday, Nov. 7, 2016, Lagarde called on governments and businesses to do more to promote the same economic opportunities for men and women and to fight discrimination that interferes with those goals. (AP Photo/Jose Luis Magana, File)

A special French court has declared International Monetary Fund chief Christine Lagarde guilty of criminal negligence in a long-running arbitration case.

But the court decided not to punish her or give her a criminal record.

The Court of Justice of the Republic ruled that her negligence while servicing as finance minister allowed for the misappropriation of funds by other people. The others, in a separate case, haven’t yet been tried.

Ms. Lagarde, who was French Finance Minister at the time of the deal in favour of tycoon Bernard Tapie, was accused of negligence in the case.

The investigation began in 2011, soon before Ms. Lagarde was named to head the IMF in the wake of sexual assault allegations against her predecessor, French economist Dominique Strauss-Kahn.

The case is part of a larger legal saga centering on Mr. Tapie, a flamboyant magnate and TV star who had sued French bank Credit Lyonnais for its handling of the sale of his majority stake in sportswear company Adidas in the mid-1990s. With Ms. Lagarde’s approval, a private arbitration panel ruled that he should get €400 million in compensation, including interest.

The deal was seen by critics as a sign of a too-close relationship between magnates and the French political elite. Mr. Tapie was close to then-President Nicolas Sarkozy, Ms. Lagarde’s boss.