French police on Monday detained Stephane Richard, who heads telecom company Orange, in a case linked to IMF chief Christine Lagarde and a state payout to a disgraced tycoon, a source close to the investigation said.
Richard, who was chief of staff to Lagarde when the 2008 payout to controversial businessman Bernard Tapie was made, was taken in for questioning along with Jean-Francois Rocchi, who headed a financial institution created to hold the non-performing assets owned by the Credit Lyonnais bank, the source said.
The International Monetary Fund chief was questioned for two days in May about the 400-million-euro ($515-million) payout to Tapie, but she avoided charges and was instead named an "assisted witness".
The arbitration followed a dispute between the businessman and partly state-owned bank Credit Lyonnais over his 1993 sale of sports group Adidas.
The panel upheld Tapie's claim that Credit Lyonnais had defrauded him by intentionally undervaluing Adidas at the time of the sale and that the state, as the bank's principal shareholder, should compensate him.
Orange said on Monday that Richard would continue to remain the company head.
Investigators have also been probing whether Tapie was favoured in return for having supported ex-president Nicolas Sarkozy, Lagarde's then boss, in the 2007 presidential election.