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News Summary: IMF head in court in fraud probe

The Associated Press

IMF Managing Director Christine Lagarde, leaves her apartment building before appearing in French court, in Paris, Thursday, May 23, 2013. Lagarde is being investigated by a special French court over a controversial arbitrage deal, which she oversaw as French Finance minister in 2008. (AP Photo/Thibault Camus)

BLAST FROM PAST: International Monetary Fund chief Christine Lagarde faced questions at a special Paris court Thursday over her role in the 400 million euro ($520 million) pay-off to a businessman when she was France's finance minister.

THE BACKGROUND: The payment was made to entrepreneur Bernard Tapie as part of a private arbitration process to settle a dispute with state-owned bank Credit Lyonnais over the botched sale of Adidas in the 1990s. Lagarde has been criticized for her decision to let the dispute go to private arbitration rather than be settled in the courts.

THE FALLOUT: The case is seen by many in France as an example of the cozy relationship between big money and big power in France. Lagarde has denied wrongdoing.