San Francisco Frontiers - Two employees leave Adidas amid China graft probe

The probe was sparked by an anonymous letter sent to Adidas on June 7, allegedly written by staff in China, that laid out "potential leadership concerns" and allegations of "compliance violations".

"Evidence has been found that in the interaction with local vendors, one employee violated the company's code of conduct," Adidas said in a statement.

"Separately, a second employee failed to meet the company's leadership expectations of demonstrating mutual respect and trust. As a result, both employees have left the company."

Adidas added that the investigation into the allegations was still ongoing, with help from independent external advisors.

According to the Financial Times, those accused in the letter 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.

China is a key market for Adidas but its business in the world's second-biggest economy was hit hard during long-running coronavirus lockdowns.

The group's Greater China sales had however been recovering, growing eight percent last year, and Adidas has forecast double-digit growth in 2024.

But the corruption allegations "could jeopardise the goal of finally regaining a foothold in (China) after the massive slumps of the past four years," Juergen Molnar, an analyst at RoboMarkets, said last week.

X.White--SFF