International Monetary Fund chief Christine Lagarde has been put under “formal investigation” on suspicion of negligence by a French court.
The case stems back to 2008, when Lagarde was the French finance minister, when businessman Bernard Tapie was awarded €400m to settle a commercial dispute with the government.
The court alleges the settlement was rigged because of Tapie’s support of Nicolas Sarkozy, who was president at the time.
Lagarde has said she is innocent of the accusations that she played an “improper” role in the arbitration process.
She was questioned for 15 hours on Tuesday by the Court of Justice of the Republic. If she is found guilty of “simple negligence”, she could face a fine of up to €15,000 and a year in prison.
A spokesperson for Lagarde emphasised she had not been charged.