PARIS French telecoms boss Stephane Richard was sharply criticised by one of the judges and by a witness during the negligence trial of IMF chief Christine Lagarde in Paris this week.
Richard, the chief executive of Orange (ORAN.PA), is a target of investigators in a related inquiry which has yet to conclude.
He was Lagarde's chief of staff when, as French finance minister, she approved a payout to businessman Bernard Tapie in a rare out-of-court settlement which cost the French taxpayer 400 million euros ($425 million).
Richard and five others are under formal judicial investigation on suspicion of embezzlement linked to the Tapie case. Under French law, such a step often, but not automatically, leads to trial. He contests the allegations.
Richard declined to take the stand as a witness in Lagarde's trial, on the advice of his lawyer, writing a letter to the court asking it not to take this refusal as an admission of guilt.
Recommending that Lagarde be acquitted of the charge of negligence, Philippe Lagauche, the prosecutor in the special court that tried her, left open the question as to the role of Richard, a civil servant-turned businessman.
"You cannot call placing confidence in a chief of staff negligence, even should it later turn out that that confidence was misplaced, which remains to be demonstrated," he said.
However, Lagarde herself, who will hear on Monday whether she is to be acquitted, referred to Richard repeatedly during the trial as her "filter," and her lawyer said his absence at the trial had deprived it of "an essential debate".
One of the 12 lawmakers who sat as judges at the special court for French ministers said Lagarde's account "gave the strong impression of being misinformed," adding: "That misinformation is damning for Stephane Richard."
Another witness, Bruno Bezard, who was head of the state shareholding agency APE at the time, also criticised Richard and the way he dealt with the proposal to offer Tapie compensation.
"The way the chief of staff presented the case seemed to indicate a desire for an arrangement weighted strongly in favour of the interests of Mr. Tapie," he told the court.
Jean-Etienne Giamarchi, Richard's lawyer, rejected Bezard's testimony as lies.
Lagarde was accused of negligence for signing off on the unusual out-of-court settlement between the state and Tapie, a French businessman with connections to then president Nicolas Sarkozy.
The case dates back to when Tapie sued the state for compensation after selling his stake in sports company Adidas to Credit Lyonnais in 1993.
He said the bank, owned by the French state at the time, had defrauded him after it later resold its stake for a much higher sum.
Tapie subsequently received the 400 million euro settlement funded largely by taxpayers.
(Writing by Andrew Callus; Editing by Mathieu Rosemain/Ruth Pitchford)