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IMF board to grill MD on data-rigging claims this week

By Reuters | October 4th 2021
Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva. [Reuters]

The International Monetary Fund’s executive board will intensify its probe of Managing Director Kristalina Georgieva this week by separately interviewing her and investigators who said she pressured World Bank staff to alter data to favour China, people with knowledge of the meetings said.

The board will question lawyers from the WilmerHale firm on Monday about their World Bank investigation report, three people familiar with the plans said. The report alleged that Georgieva, as the bank’s CEO in 2017, applied undue pressure on staff to alter data in the flagship “Doing Business” report to benefit China.

Georgieva, who has strongly denied the accusations, will appear in person before the board on Tuesday, the day she is to deliver a virtual speech about the IMF and World Bank annual meetings Oct. 11-17, two of the sources said.

The interviews could prove pivotal in either building or eroding IMF shareholder support for Georgieva.

Thus far, the fund’s most influential member governments, including top shareholder, the United States, have withheld public comment, preferring to let the review process play out. Britain last week said in a statement to Reuters that it supports transparency in the matter. The World Bank tasked WilmerHale with investigating the “Doing Business” data irregularities identified in 2020, issuing its findings implicating Georgieva just over two weeks ago. The probe has been led by former US Attorney for the District of Columbia Ron Machen, who is co-chair of WilmerHale’s white-collar defence and investigations practice.

The investigation’s report contends Georgieva and former World Bank President Jim Yong Kim’s office pressured staff to manipulate data so China’s global ranking in the “Doing Business 2018” study of investment climates rose to 78th from 85th.

The motive was alleged to help win Beijing’s support for a major capital increase that the bank’s management was seeking at the time. An IMF spokesman declined to confirm the planned meetings. Spokespersons for WilmerHale in Boston and Washington did not respond to requests for comment.

A spokesperson for Georgieva also declined to confirm the meetings but said in an emailed statement that Georgieva “will not be deterred by these false allegations and remains committed to fulfilling the vital mission of the IMF.” 

One person familiar with the plan said the board was expected to question the WilmerHale team about its investigatory process - the scope of its assignment, how it conducted the probe and how the decision was made to publish the results, which came with little prior notification to Georgieva.

Other questions will seek details on the links between the changes to the “Doing Business” data inputs for China and the capital-raising campaign, which resulted in a $13 billion (Sh1.4 trillion) increase to the World Bank’s paid-in capital in 2018 that boosted China’s shareholding.

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