France Telecom's CEO said on Tuesday that IMF chief and former French finance minister Christine Lagarde was fully briefed before approving an arbitration process that saw businessman Bernard Tapie awarded a huge payout in 2008, reports Reuters.
Investigators are trying to determine whether Tapie's political connections played a role in the government's decision to resort to arbitration to resolve the dispute. The process led to him receiving the equivalent of 403 million euros (341 million pounds) in damages and interest.
France Telecom CEO Stephane Richard, an aide to Lagarde when she was French finance minister, was placed under formal investigation this month over his role in the decision.
He said in a statement that Lagarde was aware of all the details in the dispute, suggesting she bore more responsibility for determining its outcome than magistrates have attributed to her.
Lagarde was questioned by magistrates in May but emerged with the status of "supervised witness", which is much less serious than being placed under investigation.
"Christine Lagarde... was totally up to date on the positions of various government services and fully aware when she gave written instructions to resort to arbitration," Richard said in a statement issued by his lawyer.
Read more of this report from Reuters.