Adidas Investigates Potential Compliance Violations in China

By Andrea Figueras

Adidas is investigating potential compliance violations in China after it received an anonymous letter.

"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 of the German shoe and sportswear major said Monday.

The company received the letter on June 7 flagging potential compliance violations in the country and it is currently intensively investigating the matter together with external legal counsel, the spokesperson added.

The Financial Times first reported the allegations related to large-scale bribery. According to the newspaper, the letter, sent by some of the company's employees in China, accused senior managers of embezzling "millions of euros". It also stated that Adidas staff received kickbacks from external service providers commissioned by the company.

According to the company's 2023 annual report, sales in Greater China increased 8% on a currency-neutral basis to 3.19 billion euros ($3.41 billion).

For 2024, Adidas anticipates double-digit growth in underlying sales in Greater China, although it noted that downside risks persist due to weaker-than-expected momentum in the region.

Write to Andrea Figueras at andrea.figueras@wsj.com

(END) Dow Jones Newswires

June 17, 2024 04:03 ET (08:03 GMT)

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