Adidas in Hot Water – Bribery Scandal #trading #globalfinance #balancesheet

Adidas launched an investigation into bribery allegations in China.

Adidas has launched a probe ($) into allegations of large-scale bribery in China after a whistleblower accused senior staff of embezzling “millions of euros”. The Financial Times reports an anonymous letter, which claims to have been written by “employees of Adidas China”, alleging that staff received kickbacks from external service providers.

The letter names several employees, including a senior manager involved with the company’s marketing budget. Another senior employee in a different unit is accused of receiving “millions” in cash and physical items “such as real estate”.

Adidas confirmed it had received a letter alerting it to “potential compliance violations in China”. The company said it was “committed to complying with legal and internal regulations and ethical standards in all markets” where it operates and it was “intensively investigating this matter together with external legal counsel”.

Adidas shook up its leadership in China last year in a bid to address slumping sales. The country had been its fastest-growing market until the Covid-19 pandemic. But sales fell drastically between 2019 and 2022 amid lockdowns and consumer backlash against Western brands that refused to buy cotton from the Xinjiang region.

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