A French court has decided to investigate new IMF chief Christine Lagarde's role in a 400 million dollar (£244 million) arbitration deal in favour of a controversial tycoon.
Ms Lagarde was France's finance minister when magnate Bernard Tapie won a settlement in 2008 with a French state-owned bank over the mishandled sale of sportswear maker Adidas in the 1990s.
A commission at the Court of Justice of the Republic decided on Thursday that an investigation should be launched into her role.
A prosecutor said he suspects she abused her authority in allowing the arbitration.
Ms Lagarde took over as managing director of the International Monetary Fund last month after her predecessor, Dominique Strauss-Kahn, quit to face charges he tried to rape a New York hotel maid.
