French court overturns massive payout to tycoon Tapie

17th February 2015, Comments 0 comments

A French court overturned Tuesday a massive state payout to controversial businessman Bernard Tapie, which landed IMF chief Christine Lagarde in hot water, a judicial source told AFP.

The Court of Appeal in Paris struck out the 403-million-euro payment ($524 million) awarded by arbitrators in 2008 to settle Tapie's dispute with the now-defunct Credit Lyonnais bank, the source said.

Lagarde was France's finance minister at the time of the award won by Tapie, who had close ties to former president Nicolas Sarkozy.

Her handling of the case -- specifically her failure to challenge the award that was hugely beneficial to Tapie but prejudicial to the state -- has seen her placed under formal investigation for "negligence".

Tapie himself has been charged with fraud as part of an organised gang over the payments.

Investigators are probing whether Tapie's political ties played a role in the award.

The state-run body in charge of settling Credit Lyonnais' debts only decided to appeal the arbitration award in 2013, after Socialist President Francois Hollande came to power.

© 2015 AFP

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