Key Takeaways
- Adidas is investigating accusations that some of its employees in China have been taking kickbacks from suppliers.
- A letter by those claiming to be “employees of Adidas China” accused high-level executives of having embezzled “millions in euros,” according to a Financial Times report.
- The sneaker and sports apparel maker told Investopedia that it is looking into the matter along with outside counsel.
Adidas is investigating potential compliance violations by its employees in China following a whistleblower complaint accusing high-level executives of receiving millions of euros in bribes.
The German sneaker giant said in a statement to Investopedia that it takes allegations of possible compliance violations “very seriously,” and is “clearly committed to complying with legal and internal regulations and ethical standards in all markets where we operate.”
The company added that it received an anonymous letter June 7 and is “currently intensively investigating this matter together with external legal counsel.”
The story was first reported in the Financial Times on Sunday. It said the letter initially appeared briefly on a Chinese social media site earlier this month, purported to be written by “employees of Adidas China.” The post named several workers in China who allegedly took kickbacks, including a senior manager who is accused of having received “millions in cash from suppliers, and physical items such as real estate.”
Adidas Has Struggled in China Since COVID-19 Outbreak
The company’s business in China has struggled since 2020 when the outbreak of COVID-19 led to long lockdowns that dried up sales. In addition, Adidas—along with other Western companies, including Nike (NKE)—faced blowback from Chinese consumers after pledging in 2021 not to buy cotton from China’s Xinjiang region over charges that Beijing was using forced labor there.
Adidas shares were down 3.3% in German trading as of 10:30 a.m. ET Monday.