An appeal court on Wednesday handed the CEO of France's Orange telecoms giant Stephane Richard a one-year suspended sentence for complicity in misuse of public funds over a massive 2008 state payout to businessman Bernard Tapie.
Richard was chief of staff to then finance minister and current European Central Bank chief Christine Lagarde when she approved a 404-million-euro ($453-million) arbitration payment to Tapie to settle a long-running dispute over his stake in Adidas sports apparel company.
The ruling overturned a lower court's not guilty verdict against Richard, 60, and three others in a case that ensnared a slew of senior officials, including former president Nicolas Sarkozy.
Tapie, a flamboyant tycoon and former minister who died last month, was himself acquitted of defrauding the state.
Richard said he would appeal the ruling, which included a 50,000-euro ($56,000) fine.
"The accusations of complicity in the embezzlement of public funds are without merit and are not based on any evidence. I reject them completely and will appeal," Richard said in a statement to AFP.
Orange's board of directors scheduled a meeting for later Wednesday to decide Richard's future. His term is due to end in mid-2022.
The economy ministry said the board will "draw conclusions" from the ruling. The French government holds a 23 percent stake in Orange.
The scale of the damages paid to Tapie sent shockwaves through France and created suspicion that the arbitration panel appointed to settle his dispute with the state was biased in his favour.
The panel judged that Tapie 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.
Lagarde came under fire for deciding not to appeal the amount of the award -- 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 vehemently denied.
In Wednesday's ruling, Tapie's former lawyer Maurice Lantourne was handed a three-year sentence, including one year to serve in prison and two suspended.
Former magistrate Pierre Estoup was ordered to serve three years in prison.
Jean-Francois Rocchi, the former head of an entity created by the state to settle with Credit Lyonnais creditors, was given a two-year suspended sentence.