Bernard Tapie bounces back from ignominy, giving a timely boost to Lagarde

The timing could hardly have been better. Bernard Tapie, probably the most controversial businessman in modern French history, was cleared earlier this week of the charge that he defrauded the state and Crédit Lyonnais – then majority-state-owned – of €404 million awarded to him to settle a dispute involving the sale of his controlling stake in the sportswear company Adidas.

Tapie, now 76-years-old and suffering from cancer, was the primary victor in what was a long-running and bitterly contested legal battle. But the fact that all charges against him, including that of embezzlement, were dropped yesterday by Paris’s top criminal court also disperses a cloud hanging over the head of Christine Lagarde, the newly-nominated head of the European Central Bank.

At the time of the award to Tapie, Lagarde was finance minister in the Government of Nicolas Sarkozy, whose election to the presidency in 2007 was due in part to the support given his campaign by Tapie. She was urged to intervene and to halt the payment pending an investigation, but she chose to do nothing, allegedly as a favour to Sarkozy. In 2011, she was herself investigated for her part in the affair and, having avoided criminal charges, was convicted of negligence.

The fact that in their ruling yesterday, judges found nothing in the case to confirm the suggestion that the 2008 payout was tainted by fraud means that Lagarde – currently working her notice as head of the International Monetary Fund – can now look ahead to her confirmation hearing as ECB chief without having to confront the suggestion that she was in some way linked to corruption.

Lagarde will also be pleased that her chief of staff at the finance ministry, Stephane Richard, now head of the Telecoms giant Orange, was cleared by the same court of complicity in fraud.

Richard protested his innocence with particular vehemence. “[The accusation] is the cross that I carry,” he told reporters in advance of the ruling. “I was there in the wrong place, at the wrong time. ”

As for Sarkozy, he has enough on his plate already. He is due to appear in court later in the year to answer the charge that he promised a judge a top job in Monaco in exchange for inside-information relating to an investigation of the claim that he accepted illicit campaign funds from the L’Oreal heiress Liliane Bettencourt. Ms Bettencourt has since died and the case was dropped, but the charge of abuse of the legal process stands.

While others are wiping the sweat from their brows, the man at the centre of the case is celebrating his total vindication.

“Today the court has delivered a verdict with rare independence that is exceptionally clear, and it is a cause of immense satisfaction for us and a huge relief,” Tapie’s lead lawyer, Herve Temime, told reporters.

The businessman has experienced little good news in recent years. Not only did his fraud trial spin out, painfully and expensively, over three long years, but the stomach and oesophageal cancer that he thought he had beaten a decade ago has since returned in aggressive form. He was unable to attend the tribunal and was told the good news by his lawyers while undergoing treatment in hospital.

Tapie, who used to flaunt his wealth, owning a mansion in Paris worth some €45 million and a 72-metre yacht, has been a household name in France since the 1980s. He built his early reputation as an entrepreneur specialising in the rescue and recovery of ailing businesses, but came to wider prominence with his sponsorship of the cycling team La Vie Claire – named after his nationwide health food chain – that won the Tour de France in 1983 and 1984. When he then took over Marseille football club and presided over its glory days, in which it won the First division title four times and the Champions League in 1993, it seemed as if he could do no wrong.

The icing on the cake was a political career that he ran in parallel with his businesses. He was twice elected to the French National Assembly as a member, however ironical and contradictory it must have appeared, of the Radical Party of the Left and was briefly the minister for urban affairs during the presidency of François Mitterrand. The irony that he later offered support to Sarkozy, from the centre-right, is explained by the fact that the future President had undertaken to review the corporate tax code, considered onerous by the country’s wealthiest entrepreneurs.

Nemesis came out of the blue in 1993 with the charge that Tapie had engaged in match-fixing at Marseille, which, when proved, resulted in the club’s forcible relegation to the second division and, in the case of Tapie, a two-year prison sentence, of which he served one year and four months.

The shock felt around France is difficult to exaggerate. Once celebrated, Tapie was now shunned. More to the point, excluded for three years from the directorship of publicly-quoted companies, his business empire began to implode.

Adidas, which he had bought, using bank loans, for the equivalent of €245 million in 1989, was put up for sale, only for his stake to be snapped up by Crédit Lyonnais, his main creditor. This was considered highly unusual at the time. Normally the bank would have disposed of the asset by placing it on the open market. Instead, it sold it on to the businessman Robert Louis-Dreyfus for the sum of €685 million – far in excess of the value it placed upon it when negotiating with Tapie.

Louis-Dreyfus, who died in 2009, turned the company into an international brand, with annual revenues approaching €6 billion. Tapie sued, claiming that he had been defrauded of a fair payment for his holding.

In 2008, a tribunal heard the case in Paris and awarded Tapie compensation, paid by the state and the bank, totalling €404 million. By this time, Sarkozy was President and Lagarde his finance minister. But it was not until 2015, with François Hollande now in the Élysée, that accusations of fraud made their way to the courts. Tapie was ordered to pay back the money he had been awarded and ordered to stand trial on charges of fraud and embezzlement.

It is these charges that have now been dropped. Those who wrote off Tapie as a beaten man are being forced to eat their words.

When France comes to look back on the flamboyant figure it once idolised, it will recall not only his sporting achievements (to say nothing of the movie in which he starred, Men &Women: A User’s Guide), and his time in jail for match-fixing, but his sheer indominability in the face of state-sponsored adversity. As for Crédit Lyonnais, for which Nigel Farage once worked, its headquarters in Paris were destroyed in a mysterious fire in 1996 in which most of its files were lost. It was fully privatised in 1999 and sold off to Crédit Agricole, which runs it as LCL.

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