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French Court Finds IMF Chief Lagarde Guilty, But No Punishment Ordered

IMF chief Christine Lagarde, pictured in court in Paris on December 12, was not punished.

A special court in France has found International Monetary Fund (IMF) chief Christine Lagarde guilty of negligence over a huge payout to a business magnate while she served as France's finance minister.

In announcing its ruling on December 19, the Court of Justice of the Republic decided not to punish her.

"The context of the global financial crisis in which Madame Lagarde found herself in should be taken into account," said Martine Ract Madoux, the main judge, in explaining the absence of any sentence.

The case revolves around a 403 million-euro ($425 million) arbitration deal given to tycoon Bernard Tapie in 2008 over the botched sale of sportswear maker Adidas in the 1990s.

The ruling risks triggering a new leadership crisis at the IMF after Lagarde's predecessor Dominique Strauss Khan resigned in 2011 over a sex-assault scandal.

The Washington-based institution's executive board was expected to meet shortly to consider the implications of the verdict, IMF spokesman Gerry Rice said.

Based on reporting by Reuters and AP