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Monday, July 15, 2024
Law

Adidas Whistleblower Alleges Widespread Bribery in China

  • Executives in China are accused of kickbacks and embezzlement. 
  • The whistleblowers claim to be longtime employees in China.
Jeff Le-USA TODAY Sports

Adidas announced Monday it was opening an investigation into possible “compliance violations” in China, after a whistleblower anonymously sent a letter to company headquarters.

The letter accuses senior executives based in China of getting millions of euros in bribes. 

A company spokesperson said Adidas received the letter June 7 and is investigating the matter with external legal counsel. The letter, which accuses executives of corruption and embezzlement of funds, had appeared on Chinese social media platform Xiaohongshu.

The letter alleges that a senior executive in China embezzled millions from the company’s marketing budget and received kickbacks from outside marketing agencies to prioritize them over other competitors.

The same executive was also accused of “nepotism” and “workplace bullying.” While anonymous, the letter claims to be written by “employees from Adidas China.” Jieman, a Chinese state media outlet, reported on the accusations last week and said the letter was sent directly to company headquarters in Germany before being shared publicly. 

“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,” a spokesperson told The Wall Street Journal

The investigation is the latest crisis for Adidas in recent years. The company, along with Nike and other manufacturers, faced consumer boycotts in China over its opposition to cotton from Xinjiang, where the country is accused of human rights violations for forced labor and torture, among other issues. Last year, the company dealt with serious financial and public relations hits from its relationship with the rapper Ye, formerly known as Kanye West. The rapper had a dominant Adidas product line that collapsed after his unstable behavior in 2022, including antisemitic remarks and chronically inappropriate behavior in the workplace.

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