PARIS International Monetary Fund Managing Director Christine Lagarde said on Sunday she was confident she had done nothing wrong as she faced a court hearing about a state payout in 2008 to a French businessman.
Lagarde was set to stand trial on Monday over her role in a 400 million euro ($428 million) payment to Bernard Tapie when she was France's finance minister in the government of former conservative President Nicolas Sarkozy.
Lagarde is accused of negligence leading to misuse of public funds by improperly approving a decision to allow an out-of-court arbitration in the dispute with Sarkozy supporter Tapie.
She could face up to a year in jail and a fine of 15,000 euros if convicted. A guilty verdict would also risk plunging the IMF, which she took over in 2011 after her predecessor Dominique Strauss-Kahn quit amid a sex scandal, into a new leadership crisis.
"Negligence is a non-intentional offense. I think we are all a bit negligent sometimes in our life. I have done my job as well as I could, within the limits of what I knew," she said on France 2 television.
Lagarde said she was confident and determined, and denied that she had favored Tapie or had acted on Sarkozy's orders.
The case goes back to when Tapie sued the state for compensation after selling his stake in sports company Adidas to Credit Lyonnais in 1993. He claimed the bank, owned by the French state at the time, had defrauded him after it later resold his stake for a much higher sum.
Lagarde, who was French finance minister from 2007 to 2011, signed off on the decision to seek an extremely rare out-of-court settlement in the dispute between the state and Tapie that ended up costing taxpayers dearly.
The arbitration judges ruled in Tapie's favor and ordered the state payout to him, but appeals courts have since thrown out that settlement decision.
A Paris appeals court has ordered Tapie to reimburse the state, but he has lodged an appeal that is still pending.
The trial will be only be the fifth in the history of the Cour de Justice de la Republique, a special court that tries ministers for crimes in office. It is made up of three judges and six lawmakers from both the lower and upper houses of parliament.
The IMF said on Thursday that its executive board continues to be briefed on the court case and retains confidence in Lagarde's ability to lead the organization.
(Reporting by Geert De Clercq and Sophie Louet; Editing by Tom Heneghan)