FRANKFURT, Germany— Adidas shares slid Monday because the German sportswear large confirmed it was “intensively investigating” allegations that senior workers in China embezzled hundreds of thousands of {dollars}.
The Monetary Occasions reported on the weekend {that a} letter, allegedly written by “workers of Adidas China”, accused a number of Chinese language workers by title.
In a press release Monday Adidas — solely simply recovering from a interval of turbulence after its break up from controversial rapper Kanye West — stated a probe was underneath method.
READ: Adidas investigating corruption allegations in China: FT
“We obtained an nameless letter indicating potential compliance violations in China,” the group stated in a press release, including it was “intensively investigating this matter along with exterior authorized counsel”.
“Adidas takes allegations of potential compliance violations very severely and is clearly dedicated to complying with authorized and inside rules and moral requirements in all markets the place we function,” it added.
Shares within the clothing store had been down about 3.5 % on Frankfurt’s blue-chip DAX index on Monday.
China is historically a vastly vital marketplace for Adidas. Its gross sales there suffered in recent times throughout long-running coronavirus lockdowns however had began recovering strongly.
$268-M a yr advertising price range
Based on the Monetary Occasions, these accused included one of many firm’s executives concerned with Adidas’s advertising price range in China, which it stated stood at 250 million euros ($268 million) a yr.
One other Adidas China supervisor is alleged to have obtained “hundreds of thousands in money from suppliers, and bodily objects comparable to actual property”, in line with the paper.
The letter, which was posted this month on the Chinese language social media platform Xiaohongshu, was not seen on the web site on the weekend, however a purported copy, the authenticity of which AFP was unable to confirm, was posted on a number of accounts.
Firm insiders quoted by the paper stated the letter didn’t present proof for the allegations however appeared well-informed about confidential inside points.
READ: Adidas ends Kanye West partnership over antisemitism, hate speech
In 2022, Adidas ended its tie-up with West, with whom the corporate had developed the profitable line of Yeezy merchandise after his anti-Semitic feedback triggered an outcry.
It dealt an enormous monetary blow to the sportswear large, which recorded its first annual loss in over 30 years in 2023.
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Nonetheless, in current months the corporate has been returning to a greater monetary footing.
