I.M.F. Chief to Face French Investigation

@nytimesThe New York Times

I.M.F. Chief to Face French Investigation

PARIS — A French court said Thursday it would investigate the role of the new head of the International Monetary Fund, Christine Lagarde, in a $400 million arbitration deal in favor of a controversial tycoon.

Ms. Lagarde was France’s finance minister when the magnate, Bernard Tapie, won a settlement in 2008 with a French state-owned bank over the mishandled sale of the sportswear maker Adidas in the 1990s.

A commission at the Court of Justice of the Republic decided Thursday an investigation should be started over Ms. Lagarde’s role. A prosecutor has said he suspects Ms. Lagarde abused her authority in allowing the arbitration.

Ms. Lagarde took over as managing director of the I.M.F. last month after her predecessor, Dominique Strauss-Kahn, quit to face charges he tried to rape a New York hotel maid.