Christine Lagarde and Nicolas Sarkozy embroiled in new corruption inquiry

Mr Musca, who is now a senior executive at the French bank Credit Agricole,
denies any wrongdoing and has pledged to counter sue with a “false
accusation” claim against Mr Laurent.

Miss Lagarde took over as head of the IMF a year ago from Dominique
Strauss-Kahn.

The prospect of yet another IMF chief appearing in court was first raised last
year when the Court of Justice of the Republic, a tribunal qualified to
judge the conduct of French ministers, said Miss Lagarde may have been
guilty of abuse.

Miss Lagarde is said to have allowed the equivalent of £270 million to be
awarded to Bernard Tapie, a convicted football match fixer and tax dodger
who supported her then governing UMP party.

Mr Tapie, the former head of Adidas in France, claims he was cheated out of
millions by Credit Lyonnais bank when the sports kit empire was sold in
1993. In 2007, Miss Lagarde ended the long-running dispute by ordering a
panel of judges to arbitrate and, in turn, they awarded Mr Tapie the damages.

Mr Sarkozy and Miss Lagarde deny any wrongdoing.

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