The former center-left Tapie publicly supports the center-right Nicolas Sarkozy in the presidential election.
After Sarkozy’s election victory, the government – which intended to fight a legal battle with Tapie over the sale of Adidas by the defunct Credit Lyonnais – instead set up an independent arbitration panel to settle the dispute. ‘affair.
An independent arbitration committee decides that Tapie should receive 403 million euros from the government in compensation. Finance Minister Christine Lagarde defuses the ensuing outcry by insisting he will only pocket 30-50 million euros once interest, taxes and debts have been deducted.
Sarkozy’s government is embarrassed when it emerges that Tapie’s damages settlement is much higher than it had first claimed. Lagarde says the government followed the legal judgment and the sum included personal damages to the Tapie family.
Lagarde, now at the head of the IMF, is indicted by a French court on suspicion of negligence in connection with the compensation paid to Tapie when she was finance minister. Lagarde denies any improper role in the arbitration process, which she said was independent and in the best interests of taxpayers. Critics said the payment, backed by Ms Lagarde, was rigged to reward Tapie for backing Sarkozy’s election campaign.