Adidas probes alleged ‘large-scale bribery’ by staff in China: Report

Complaint includes allegations that a senior manager received real estate and ‘millions in cash from suppliers’.

Adidas

Adidas made a leadership change in China in 2023 in a bid to revive business [File: Odd Andersen/AFP]

Published On 16 Jun 2024

16 Jun 2024

International apparel brand Adidas has launched an inquiry into allegations that some of its senior staff in China were involved with large-scale bribery involving “millions of euros”, according to a Financial Times (FT) report.

The investigation was opened after the company received a whistleblower complaint, FT reported on Sunday.

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The anonymous letter, which claims to have been written by “employees of Adidas China”, accused several employees of the company in China of receiving kickbacks from outside service providers it is doing business with.

A senior manager from a different division also allegedly received “millions in cash from suppliers and physical items such as real estate”, the report said, quoting sources familiar with the investigation.

It added that none of the accused individuals has been named.

“While the anonymous authors of the letter did not provide hard evidence for their corruption allegations, they appear to be well-informed about highly sensitive and confidential internal issues” meriting a full investigation, the report said.

In the letter, also shared on Chinese social media, the accusers mention that company officials, including a senior manager involved with the marketing budget in China, were involved in the bribery.

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Adidas has acknowledged receiving the anonymous complaint and said it was investigating the 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 said in a statement issued in response to a query from the Reuters news agency.

Adidas said it could not provide further information until the investigation was completed.

The company made a leadership change in China in 2023 in a bid to revive business after suffering a slump during the pandemic.

Once Adidas’ fastest-growing and highly profitable market, Chinese consumers turned sour on the company in recent years over their refusal to buy cotton from the Xinjiang region, where human rights activists say the industry involves forced labour.

But earlier this year, the company said it expects a rebound in sales in China, predicting a double-digit growth rate.

China sales of the German sportswear giant grew by 8 percent in the first quarter, the company reported earlier.