IMF boss Lagarde's apartment searched in corruption probe

French police have carried out a raid on International Monetary Fund head Christine Lagarde's Paris home in connection with a probe into her handling of a high-profile scandal when she was a government minister. 

Wednesday's investigation concerns Lagarde's 2007 decision to order a panel of judges to arbitrate in a dispute between disgraced tycoon Bernard Tapie and the bank Credit Lyonnais, which led to Tapie being awarded almost €400 million. 

Tapie was a supporter of ex-President Nicolas Sarkozy.

Lagarde, who at the time was former president Nicolas Sarkozy's finance minister, has repeatedly denied wrongdoing in the case.

Critics said the case should not have been settled by private arbitration, since public money was at stake in the bank, which was part-owned by the state.

The settlement Tapie received is believed to be a far greater sum than he would likely have received from the courts.

"This search will help uncover the truth, which will contribute to exonerating my client from any criminal wrongdoing," said Yves Repiquet, Lagarde's lawyer. 

"Mrs. Lagarde has nothing to hide," he added. 

Tapie, who was a minister under former president Francois Mitterand, had argued that the publicly owned Credit Lyonnais had defrauded him by consciously undervaluing Adidas, a sportswear brand, when he sold it in 1993.

He was jailed in 1993 in a match-fixing scandal involving Olympique Marseille, a French football club, he formerly owned. 

Frank Guillory, a french journalist said that his first impression of the raid was that there could be some sort of political influence, as Lagarde was a centre-right cabinet minister, and the current administration is socialist. 

Guillory said that it would be "a very bad calculation" for French President Francois Hollande and his government, as Christine Lagarde represents France's public image as head of the IMF. 

"After what happened with the former IMF chief, Dominique Strauss-Kahn, I think a second french IMF head being involved with some kind of scandal will be devastating for France's image worldwide," said Guillory.

Lagarde was chosen to lead the IMF in 2011 after her predecessor Dominique Strauss-Kahn was forced to resign following a sex-scandal. 

The IMF refused to comment on the police raid, stating it would not be appropriate to comment on a case "that has been and is currently before the French judiciary".