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The detention of Stephane Richard, former aide to IMF's Lagarde, is the latest twist in $530 million payout scandal.
BRUSSELS, Belgium — French police held Stephane Richard, CEO of France Telecom-Orange, for questioning in Paris Monday in connection with the payment of $530 million to another high-profile French businessman.
Richard's detention is the latest twist in a complex scandal that's rocking the French business and political world. It's raising questions about the role of former French President Nicolas Sarkozy and Christine Lagarde, the head International Monetary Fund, who was France's finance minister when the payment was made in 2008.
Richard was a senior aide to Lagarde at the time. Last month, the IMF managing director was herself questioned by a court in connection with the case, but was not placed under investigation.
She was, however, named as an "assisted witness" — meaning she could be called upon to testify.
The court is investigating possible wrongdoing behind the government decision to set up a special arbitration panel to resolve a despute between disgraced businessman Bernard Tapie and the bank Credit Lyonnais.
Tapie claimed the bank owed him money over the sale of the sportswear company Adidas. The French businessman bought Adidas in the 1990s before he went bankrupt and ended up spending six months in jail for corruption linked to soccer match fixing.
The panel set up by Lagarde ordered the payment of $530 million to Tapie. Since Credit Lyonnais was itself in financial difficulties, the French taxpayer ended up picking up the tab.
Lagarde, who like Richard has denied any misconduct, says she set up the arbitration panel to end a long and costly legal battle.
However, prosecutors are investigating alleged links between Tapie and judges on the arbitration panel and Sarkozy's political opponents have raised questions about possible connections between the businessman and the former president.
Under French law, Richard can be held for questioning for up to 48 hours, after which a decision must be made whether to place him under a formal investigation.