* Ex-aide says Lagarde, then finance minister, knew case in
* Lagarde says she always acted in public interest
* Case revolves around big payout to businessman Tapie
PARIS, June 25 France Telecom's CEO said on
Tuesday that IMF chief and former French finance minister
Christine Lagarde was fully briefed before approving an
arbitration process that saw businessman Bernard Tapie awarded a
huge payout in 2008.
Investigators are trying to determine whether Tapie's
political connections played a role in the government's decision
to resort to arbitration to resolve the dispute. The process led
to him receiving the equivalent of 403 million euros ($528
million) in damages and interest.
France Telecom CEO Stephane Richard, an aide to
Lagarde when she was French finance minister, was placed under
formal investigation this month over his role in the decision.
He said in a statement that Lagarde was aware of all the
details in the dispute, suggesting she bore more responsibility
for determining its outcome than magistrates have attributed to
Lagarde was questioned by magistrates in May but emerged
with the status of "supervised witness", which is much less
serious than being placed under investigation.
"Christine Lagarde... was totally up to date on the
positions of various government services and fully aware when
she gave written instructions to resort to arbitration," Richard
said in a statement issued by his lawyer.
Richard is appealing the decision to place him under
investigation, a step meaning that "serious or consistent
evidence" point to probable implication in a crime.
Lagarde's lawyer in France was not immediately available to
comment on Richard's remarks.
The case has now embroiled several members of former
President Nicolas Sarkozy's cabinet, damaging his chances of
making a political comeback for the 2017 election.
After lengthy questioning in May, Lagarde said she had
always acted in the public interest as finance minister,
offering no further details about her actions.
A legal source close to the case said suspicions over
Richard's role would not necessarily influence inquiries
targeting Lagarde, suggesting there was little immediate risk of
her being called in for more questioning.
The arbitration was used to resolve a long-running dispute
between Tapie and now-defunct bank Credit Lyonnais, which he
said defrauded him by purchasing his interest in sports clothing
company Adidas in 1993 for the equivalent of 315.5
million euros, only to sell it a year later for 701 million
Investigators are trying to determine whether the close ties
between Tapie and members of Sarkozy's inner circle influenced
the government's 2007 decision to turn to a private arbitration
tribunal to settle the matter.
($1 = 0.7637 euros)
(Reporting by Chine Labbe; Writing by Nick Vinocur; Editing by