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Paris - IMF chief Christine Lagarde is to be grilled in court by prosecutors investigating a huge state payout to a disgraced tycoon during her time as French finance minister.
Lagarde has been ordered to appear before the court at the end of May to answer questions over her handling of a dispute that resulted in €400m being paid to Bernard Tapie, her lawyer said on Thursday.
Tapie is a former politician and controversial business figure who went to prison for match-fixing during his time as president of France's biggest football club, Olympique Marseille.
Prosecutors working for the Court of Justice of the Republic (CJR), a body established to investigate cases of ministerial misconduct, suspect he received favourable treatment in return for supporting Lagarde's then boss, Nicolas Sarkozy, in the 2007 and 2012 presidential elections.
They have described Lagarde's handling of the case as "questionable" and suggested she was partly responsible for "numerous anomalies and irregularities" which could lead to charges for complicity in fraud and misappropriation of public funds.
Lagarde's Paris home was raided by CJR officials last month but she has not yet been charged with any crime. The IMF has stood by her and her lawyer insisted she would be cleared of any wrongdoing.
"As has been expected for several months, the court wishes to question Madame Lagarde," her lawyer, Yves Repiquet said. "A hearing will be held at the end of May.
"Mme Lagarde will finally have the opportunity to provide the court with explanations and clarifications that will exonerate her of any criminal responsibility."
The investigation is centred on Lagarde's 2007 decision to ask a panel of judges to arbitrate in a dispute between Tapie and Credit Lyonnais, the collapsed, partly state-owned bank, over his 1993 sale of sports group Adidas.
Tapie had accused Credit Lyonnais of defrauding him by consciously undervaluing Adidas at the time of the sale and argued that the state, as the former principal shareholder in the bank, should compensate him.
His arguments were upheld by the arbitration panel but critics claimed the state should not have taken the risk of being forced to pay compensation to a convicted criminal who, as he was bankrupt at the time, would not have been able to pursue the case through the courts.
The payment Tapie received enabled him to clear his huge debts and tax liabilities and, according to media reports, left him with €20m-€40m which he has used to relaunch his business career.
He recently purchased a newspaper group in the south of France and there has been speculation about him re-entering politics as a candidate for mayor of Marseille in 2014.
A charismatic populist, Tapie was a minister under Socialist president Francois Mitterrand but he backed right-winger Sarkozy in the 2007 and 2012 elections.
Lagarde has been the head of the International Monetary Fund (IMF) since 2011, having taken over from her compatriot Dominique Strauss-Kahn who resigned after an alleged sexual assault on a New York hotel maid.
She is the first woman to head the organisation and her appointment was seen as the culmination of a glittering career in law and politics.
After rising to the executive board of US legal consulting giant Baker & McKenzie, she became France's first female finance minister after Sarkozy was elected in 2007.
