Adidas shares slide following China corruption claims

TDT | Frankfurt, Germany

The Daily Tribune – www.newsofbahrain.com

Adidas shares slid Monday as the German sportswear giant said it was investigating alleged bribery in China after senior employees were reportedly accused of embezzling huge sums.

It is another blow to the group, which has been betting on healthy business in key market China this year as it seeks to recover from the tumultuous end of its lucrative tie-up with rapper Kanye West.

The bribery claims emerged at the weekend when the Financial Times reported that an anonymous letter, allegedly written by “employees of Adidas China”, named several Chinese staff members.

In a statement Adidas said that in June it “received an anonymous letter indicating potential compliance violations in China”.

The group takes such allegations “very seriously and is clearly committed to complying with legal and internal regulations and ethical standards in all markets where we operate,” it said.

“Adidas is currently intensively investigating this matter together with external legal counsel.”

Shares in the outfitter slid more than four percent on Frankfurt’s blue-chip DAX index before winning back some ground to end the day 2.6 percent lower.

According to the Financial Times, those accused included one of the company’s executives involved with Adidas’s marketing budget in China, which it said stood at 250 million euros ($268 million) a year.

Another Adidas China manager is said to have received “millions in cash from suppliers, and physical items such as real estate”, according to the paper.

The letter, which was posted this month on the Chinese social media platform Xiaohongshu, was no longer visible on the website at the weekend, but a purported copy, the authenticity of which AFP was unable to verify, was posted on several accounts