French tycoon comes under lense in fraud probe

Bernard Tapie, one of France's popular business personalities, was placed under formal investigation Friday on charges of using political influence to win a large state pay-out in 2008.

The case is related 1993 when Tapie, former minister and supporter of ex-president Nicolas Sarkozy, sued the state for compensation after selling his stake in sports company Adidas to then state-owned bank Credit Lyonnais.

After a four-day-hearing, Paris prosecutors decided to place Tapie under formal investigation for "organised fraud" and put him on probation, Xinhua quoted defense lawyer Herve Temime as saying .

"I assure you that the file is void of evidence showing that the arbitration award, was the result of a scam," Temime told a private TV channel. "It is with the greatest serenity that we approach this phase of the procedure."

Tapie has argued the bank had defrauded him after it later resold his stake for a much higher sum.

In 2008, Christine Lagarde, then finance minister of France decided to use arbitration to handle a row that resulted in 400 million euros ($520 million) being paid to the businessman.

Last month, Lagarde, who is presently the International Monetary Fund chief, was also questioned for two days about the payout to Tapie, but she was named an "assisted witness".

Meanwhile, her cabinet chief at the time, Stephane Richard, Orange CEO was placed under formal investigation for "organised fraud" as part of the corruption probe.