"It just proves that you must always fight until the very end," French businessman Bernard Tapie said after being acquitted of fraud and misuse of public funds

Paris (AFP) - Flamboyant French businessman Bernard Tapie was on Tuesday acquitted on charges of defrauding the state of more than 400 million euros ($450 million) with a massive 2008 arbitration award that has also ensnared IMF chief Christine Lagarde.

In its ruling, the Paris criminal court found “nothing in the case that confirmed” the allegation that the arbitration payout was tainted by fraud.

The decision draws a line under a two-decade legal saga that entangled a slew of senior officials, including former president Nicolas Sarkozy and Lagarde, who has just been named the next head of the European Central Bank.

Tapie, a 76-year-old former Socialist minister who rose from humble beginnings to build up a sporting and media empire, was put on trial in March for fraud and misuse of public funds.

“It just proves that you must always, always fight until the very end,” said Tapie.

If found guilty he could have faced a five-year jail term. Currently diagnosed with cancer of the stomach and oesophagus, he was not in court for health reasons.

His lawyer Herve Temime hailed the court for its “exceptionally clear” judgement which he said was “a huge relief”.

- Questions over payout -

The case centred on a payment of 404 million euros ($453 million) that was awarded to him in 2008 by a government arbitration panel.

The panel judged he had been the victim of fraud when he sold his stake in the Adidas sports apparel company in 1993 to state-run French bank Credit Lyonnais, which was found to have undervalued the sportswear brand.

The scale of the damages paid to him sent shockwaves through France, but the ruling was soon tainted by allegations that the panel had been biased in Tapie’s favour amid questions as to why the dispute was settled in arbitration, rather than in court.

Lagarde, who was economy minister at the time, decided not to appeal the ruling – a decision for which she was later found guilty of negligence by a court that rules on cases of ministerial misconduct.

Lagarde’s handling of the case sparked suspicion that her former boss Sarkozy, whom Tapie had backed for president in 2007, was favourably disposed towards the businessman – allegations Sarkozy has vehemently denied.

In December 2015, a court ordered Tapie to pay back the money after finding the settlement to be fraudulent, with the case going to trial in March this year.

- Orange boss acquitted -

Stephane Richard, former chief-of-staff at the economy ministry and current CEO of Orange, was also acquitted of complicity for having referred the Tapie case for arbitation

In its ruling on Tuesday, the Paris court also acquitted four others of complicity for having referred the case to arbitration, one of whom was Stephane Richard, former chief-of-staff at the economy ministry under Lagarde and now head of French telecoms giant Orange.

Tapie made a fortune in the early part of his career by taking over failing companies, and flaunted his wealth by buying a vast Paris townhouse and a 72-metre (236-foot) yacht.

He also splashed out on a cycling team, and on the Olympique de Marseille football team which he guided to five successive league triumphs and the 1993 Champions League title.

But things began to unravel in the 1990s when he served six months behind bars in 1997 for match-fixing. His business empire later collapsed.

He was able to repay his debts after the arbitrators ruled he had been the victim of fraud when he sold Adidas in 1993, and soon bought another yacht, which he named “Reborn”.

But the cancellation of the payment in 2015 left him high and dry again.