International Monetary Fund head Christine Lagarde has been placed under formal investigation by a French court.
The FT reported that Lagarde (pictured) is being investigated on suspicion of negligence due to an arbitration process in 2008 that awarded €400 million to businessman Bernard Tapie to settle a commercial dispute with the state. It is alleged that this process was rigged because of Tapie's support for president Niocolas Sarkozy in the 2007 presidential election.
Lagarde denies any impropriety in the arbitration process, which she says was independent and in the best interests of taxpayers, the FT reported. In a statement to the AFP news agency today, she said that she had instructed her lawyer to appeal against the decision to place her under investigation.
Her spokesman added that the charge carried a maximum penalty of one year in prison and a fine of €15,000 if convicted.