Feb. 27 (Bloomberg) -- French police raided the home and office of former President Nicolas Sarkozy’s chief-of-staff in relation to a 385 million-euro ($504 million) arbitration award to businessman Bernard Tapie, France Info radio said.
The police searched Claude Gueant’s addresses in Paris as part of an investigation of the 2008 arbitration court decision in favor of Tapie, a Sarkozy supporter, the radio station said today, without citing anyone. The Paris prosecutor’s office declined to comment.
Separately, the Cour de Justice de la Republique, which investigates ministers’ actions in office, is looking into whether then French finance minister Christine Lagarde erred in agreeing to an arbitration to end the dispute with Tapie. The court opened its investigation into whether there was “complicity in forgery” or “complicity in misuse of public funds” in the case in 2011, soon after Lagarde became head of the International Monetary Fund.
The first documents seized at Gueant’s home and office may show that Sarkozy’s office pushed Lagarde to use an arbitration panel to end the dispute, the radio station said. The state turned to arbitration to avoid further appeals after winning a 2006 ruling by the nation’s highest court overturning what had been an award of less than half what Tapie eventually got.
Lagarde has stood by her decision in the case, saying in an interview with France 2 television on Jan. 25 that “it was the best solution at the time and I think it was the right choice.”
Mediapart news website reported this month that the Cour de Justice may indict Lagarde in the case.
The arbitration panel awarded Tapie 385 million euros in damages to settle his dispute over his company’s sale of German sportswear brand Adidas AG. Tapie claimed Credit Lyonnais mishandled the 1993 sale and pursued a claim against the formerly state-owned bank’s liquidator.
The arbitration court awarded Tapie 45 million euros in damages on top of 240 million euros for his creditors and about 100 million euros in interest. Lagarde refused to appeal the decision, saying “a very large majority” of the money would return to the state through the creditors’ claims.
Lagarde was France’s longest-serving finance minister since the 1970s. Questions about her handling of the dispute involving Tapie, a former Socialist minister who endorsed Sarkozy’s presidential bid, lasted throughout her time in office.
French police have also searched the homes of France Telecom SA Chief Executive Officer Stephane Richard, who was Lagarde’s chief-of-staff when she was finance minister, Tapie, the arbitration panel judges and Tapie’s lawyer’s office.
To contact the reporter on this story: Helene Fouquet in Paris at firstname.lastname@example.org
To contact the editor responsible for this story: Vidya Root at email@example.com