Kicks for Cash: Adidas China Rocked by Whistleblower Revelations

Senior managers accused of bullying and receiving “millions in cash” in kickbacks 

Bribery Abroad?

Athletic apparel brand Adidas has opened an investigation in China after receiving a letter from anonymous whistleblowers accusing senior executives in the country of “compliance violations”. 

An Inside Job

The news broke last week on the Chinese state media outlet Jiemian, which stated that the letter, whose writers refer to themselves as employees of Adidas China, had been sent to Adidas’ headquarters in Germany. 

Bad Behavior

Allegations in the letter include Adidas staff enjoying kickbacks from advertising agencies and celebrities. A senior executive was also accused of nepotism and workplace bullying, including swearing at subordinates. 

An Evil Boss?

In addition, the senior executive also supposedly isolated some of Adidas China’s employees, forcing them to resign. The report also stated that other people who followed the executive’s instructions were promoted. 

Working With the Stars

The brand is known to regularly engage with celebrities to become Adidas ambassadors, especially in China. Examples include singer and actor Jackson Yee, the Chinese rapper Gali, actress and singer Yang Mi, and the Chinese singer of Uyghur descent, Dilraba.  

It Gets Worse

Another senior manager, who is employed in a different Adidas branch in China, reportedly received “millions in cash from suppliers and physical items such as real estate”.

Fix This or Else…

The letter also warned Adidas that should they not follow up on the accusations, the issue would be disclosed to external media and “legal departments”.

Insider Information

The letter was also briefly shared on the Chinese social media platform Xiaohongshu earlier this month. Although company insiders state that no evidence of the accusations was provided in the letter, it did appear well-informed on confidential internal matters. 

Blowing a Budget

One of the accused managers is supposedly involved with Adidas’ Chinese marketing budget. As per the letter, the promotional budget for Greater China amounts to 250 million euros ($268 million) annually and includes expenses for branding, marketing, and trade fairs. 

Friends in High Places?

According to those in the know, a senior manager accused in the whistleblower report was hired by New China CEO Adrian Siu, who was the chief executive officer of Chinese lingerie maker Cosmo Lady until 2022. 

Legal Advice

Adidas Germany did confirm that it had received the letter on June 7th. Head of Media Relations, Claudia Lange, responded in an email saying: “Adidas is currently intensively investigating this matter together with external legal counsel”. 

This Is Serious

The German brand also stated: “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 Drop In Shares

This bombshell has already affected Adidas’ shares, which fell 3.7% on Monday June 17th, and dropped a further 1.73% the next day. 

Big Damage to a Big Name?

Adidas is known as the world’s second-largest sportswear retailer (after Nike). Greater China is a key market for the brand and is responsible for about 15% of the company sales. 

Not The First Crisis

This whistleblower report is only the newest problem for Adidas. Along with Nike, H&M, and other big manufacturers in the West, the brand recently faced consumer boycotts in China due to the brand disagreeing with Xinjiang cotton. 

More Human Rights Violated

The region of Xinjiang has been accused of violating human rights due to reports of, among other issues, forced labor and torture. 

Post-Covid Problems

Although Adidas China experienced a rise in sales growth following the termination of Covid restrictions at the end of 2022 in Beijing, its market share has taken a blow due to recent controversies. 

Bad Brand Ambassadors

Last year, Adidas also faced harsh financial- and public relations problems thanks to its relationship with the rapper Ye, also known as Kanye West. 

Bad Publicity

Ye had enjoyed a dominant Adidas product line that failed due to his unstable conduct in 2022, which included antisemitic remarks and unsuitable behavior in the workplace. 

No Changes… Yet

According to insiders, none of the individuals accused in the letter have been placed on leave. Adidas added that no further information will be provided until the investigation has been completed. 

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The post Adidas China Facing Charges of Bribery and Embezzlement first appeared on EcoHugo.

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For transparency, this content was partly developed with AI assistance and carefully curated by an experienced editor to be informative and ensure accuracy.