France has formally opened an investigation into International Monetary Fund chief Christine Lagarde to determine whether she abused her authority when she served as French finance minister, and tried to resolve a legal dispute involving a controversial tycoon.

A special tribunal that can judge ministers Tuesday asked three judges to determine whether Lagarde is guilty of “complicity in embezzlement or misuse of public funds.”

The court ordered the investigation last week, after examining the results of a preliminary probe of Lagarde's actions. Prosecutors accuse her abusing her authority in 2007 by allowing an arbitration panel to settle a long-running dispute between French tycoon Bernard Tapie and a state-owned bank. The arbitration panel ultimately awarded more than $400 million in damages to Tapie, a friend of French President Nicolas Sarkozy.

Lagarde, who took over the IMF last month, has denied any wrongdoing or illegality in the case, and the IMF's executive board has expressed confidence in her.

Lagarde stepped down as finance minister in June to assume the role of IMF chief, becoming the first woman to hold one of the top posts in international finance. She replaced Dominique Strauss-Kahn, who resigned in May to face charges of attempted rape of a New York hotel maid.