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IMF boss lagarde is quizzed in negligence probe

IMF chief Christine Lagarde has been put under formal investigation by French magistrates for negligence in a political fraud affair dating from 2008 when she was French finance minister.

Lagarde, who this week was questioned by magistrates in Paris for a fourth time under her existing status as a witness in the long-running saga, said she would contest the decision.

"I have asked my lawyer to use all recourse against this decision which I consider to be completely unfounded," she said on BFMTV. "I am returning to work in Washington this afternoon."

Under French law, magistrates place someone under formal investigation when they believe there are indications of wrongdoing, but that does not always lead to a trial.

Lagarde's lawyer, Yves Repiquet, said he would appeal the magistrates' decision and so the matter would not prevent Lagarde from doing her job at the head of the International Monetary Fund in the meantime.

"She is now on her way back to Washington and will, of course, brief the (IMF) board as soon as possible," IMF spokesman Gerry Rice said. "Until then, we have no further comment."

The inquiry relates to allegations tycoon Bernard Tapie (inset), a supporter of conservative ex-president Nicolas Sarkozy, was improperly awarded €403m in an arbitration to settle a dispute with now defunct, state-owned bank Credit Lyonnais.