Adidas Probes Compliance Violations in China Over Embezzlement Claims

Adidas is investigating compliance violations in China following an anonymous letter accusing local executives of embezzling millions. The allegations include bribes, kickbacks, and workplace bullying. Adidas China's sales account for 15% of the company's total, growing 8% in 2023 after recovering from pandemic-induced setbacks.

Adidas has initiated a probe into potential compliance violations in China after an anonymous letter accused local executives of embezzling millions of euros, according to sources. The letter, received on June 7, detailed claims of bribery, kickbacks, and workplace misconduct.

The German athletic apparel company confirmed the investigation, stating it is working with external legal counsel to assess the situation. Notably, the whistleblowers warned that failure to address their concerns could lead to disclosure to media and legal authorities.

The news has affected Adidas' market performance, with shares dropping 1.73% on the latest trading day. The Greater China region is significant for the brand, contributing 15% to its overall sales, and saw an 8% sales growth in 2023.