IMF board backs Christine Lagarde despite French inquiry into alleged abuses of power

The International Monetary Fund has said it continues to have “confidence” in its managing director Christine Lagarde despite a French inquiry into alleged abuses of power.

An IMF spokesman said the fund’s board backed Christine Lagarde.

The probe relates to Christine Lagarde time as French finance minister and her involvement in the payment of compensation to businessman Bernard Tapie.

Christine Lagarde, who took over as IMF chief in 2011, denies any wrongdoing.

Her Paris apartment was searched by police investigators last week.

“The executive board has been briefed on this matter, including recently, and continues to express its confidence in the managing director’s ability to effectively carry out her duties,” said IMF spokesman Gerry Rice at a press conference on Thursday.

Christine Lagarde was involved in a dispute between French businessman Bernard Tapie and the bank Credit Lyonnais in 2007.

She referred the case to an arbitration panel, after which Bernard Tapie switched his support to Nicholas Sarkozy, then leader of Christine Lagarde’s UMP party, in the presidential election campaign.

Bernard Tapie was later awarded 400 million euros in damages by that panel – a decision approved by Christine Lagarde.

Christine Lagarde has yet to be placed under formal investigation in the case and has denied any wrongdoing.

However, the case comes at a difficult time for the IMF.

Christine Lagarde replaced IMF disgraced former chief Dominique Strauss-Kahn less than two years ago.

The IMF is also deeply involved in managing the continuing eurozone crisis, including the bailout of Cyprus.