IMF chief Georgieva in spotlight after World Bank China rigging report

By Andrea Shalal and Leigh Thomas

WASHINGTON/PARIS (Reuters) -The International Monetary Fund's executive board is reviewing a report prepared for the World Bank that found that IMF chief Kristalina Georgieva in her previous senior role at the World Bank pressured staff to change data to favor China, the IMF said on Friday.

Georgieva has said she disagrees "fundamentally with the findings and interpretations" https://www.reuters.com/business/sustainable-business/world-bank-kills-business-climate-report-after-ethics-probe-cites-undue-pressure-2021-09-16 of the independent report, prepared by the law firm WilmerHale at the request of the World Bank's ethics committee and issued on Thursday.

The report found that Georgieva and other World Bank officials applied "undue pressure" on staff https://www.reuters.com/business/sustainable-business/world-bank-kills-business-climate-report-after-ethics-probe-cites-undue-pressure-2021-09-16 to boost China's ranking in the bank's "Doing Business 2018" report on nations' business regulations.

 

The IMF review was launched after Georgieva briefed the board on the issue on Thursday.

"The IMF board is currently reviewing this matter," IMF spokesperson Gerry Rice told Reuters.

"As part of the regular procedure in such matters, the ethics committee will report to the board," Rice said, but gave no time table.

Georgieva addressed the issue at the start of a previously scheduled town hall-style meeting with IMF staff on Friday, according to three people who participated in the virtual event and a fourth who was briefed on her remarks.

'NOT TRUE'

She said she highly values data and analysis and does not pressure staff to change data as the report found, according to a transcript provided to Reuters.

"Let me put it very simply to you. Not true. Neither in this case, nor before or after, I have put pressure on staff to manipulate data," Georgieva told IMF staff, according to the transcript.

The Washington-based multilateral lender was seeking China's support for a big capital increase at the time. Georgieva at the time served as the World Bank's chief executive.

Georgieva has led the IMF and its roughly 2,500 staff since 2019. She has helped lead the global response to the COVID-19 pandemic while securing support of a $650 billion expansion of IMF emergency reserves.

Some of the IMF's 190 member countries, which fund its lending and other projects aimed at alleviating poverty and bolstering global financial stability, said they are reviewing the ethics report as well.

The U.S. Treasury Department, which manages the dominant U.S. shareholdings in the IMF and the World Bank, said it is analyzing the report's "serious findings."

"It's a serious subject. The independent report is not a judgment and the IMF's ethics committee and board must study the report, listen to the managing director and present its conclusions," a French finance ministry source said.

"It's on this basis that France will be able to fully evaluate the situation," the source added.

Britain is committed to the good governance of the World Bank Group and is considering the investigation's findings, a government spokesperson said.

Officials from Japan, another key donor to both institutions, are talking to counterparts in other countries about the findings, a government source with knowledge of the matter told Reuters.

The World Bank said on Thursday it would cancel the "Doing Business" report series, which has run since 2003, dismaying investors who rely on it to help them assess country risk.

The news and any fallout is likely to dominate the IMF and World Bank annual meetings, which occur concurrently in Washington the second week of October.

(Reporting by Andrea Shalal in Washington and Leigh Thomas in Paris; Additional reporting by David Lawder; Writing by Carmel Crimmins; Editing by Catherine Evans, Will Dunham and Heather Timmons)