Adidas AG shares slid yesterday, as the German sportswear giant confirmed it was “intensively investigating” allegations that senior employees in China embezzled millions of US dollars.
The Financial Times on the weekend reported that a letter, allegedly written by “employees of Adidas China,” named several Chinese employees.
Adidas — only just recovering from a period of turbulence after its split from controversial rapper Kanye West — yesterday said a probe was under way.
Photo: AFP
“We received an anonymous letter indicating potential compliance violations in China,” the group said in a statement, adding that it was “intensively investigating this matter together with external legal counsel.”
“Adidas 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,” it added.
Adidas shares were down 4 percent at 216 euros on Frankfurt’s blue-chip DAX as of 10:30am GMT.
China is a hugely important market for Adidas. Its sales there suffered in recent years during the long-running COVID-19 lockdowns, but have started recovering strongly.
Those accused included one executive involved in Adidas’ marketing budget in China, which the company said stood at 250 million euros (US$268 million) a year, the Financial Times said.
Another Adidas China manager is said to have received “millions in cash from suppliers and physical items such as real estate,” the paper said.
The letter, which was posted this month on the Chinese social media platform Xiaohongshu (also known as Little Red Book), was no longer on the Web site over the weekend, but a purported copy, the authenticity of which AFP was unable to verify, was posted on several accounts.
The letter did not provide evidence for the allegations, but appeared well-informed about confidential internal issues, the paper quoted company insiders as saying.
Adidas in 2022 ended its tie-up with West, with whom the company had developed the lucrative line of Yeezy products, after his anti-Semitic comments triggered an outcry.
It dealt a huge financial blow to the sportswear giant, which recorded its first annual loss in more than 30 years last year. However, the company has been returning to a better financial footing in recent months.
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