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 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 U.S. Attorney for the District of Columbia Ron Machen, who is co-chair of WilmerHale’s white collar defense and investigations practice.
Capital Increase
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 allegedly 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 drawn in the report between the changes to the “Doing Business” data inputs for China and the capital-raising campaign, which resulted in a $13 billion increase to the World Bank’s paid-in capital in 2018 that boosted China’s shareholding.
Another source said there also will likely be questions over discrepancies between witness interviews, the report’s conclusions and later public statements from at least one person interviewed. Shanta Devarajan, the former World Bank economist who oversaw the “Doing Business” 2018 report released in October 2017, said he never felt pressure from Georgieva, and that the WilmerHale team used only half of his statements. Machen did not respond to a request for comment.
Reuters with additional editing by Kevin Hamlin.
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