Two employees leave Adidas after probe of China corruption claims

Two Adidas employees in China have left the sportswear company after it found evidence of wrongdoing during an investigation into a whistleblower’s claims that senior staff had embezzled “millions of euros”. 

Two employees from the marketing department, including one senior executive, left Adidas after it launched a probe earlier this month into an anonymous letter that accused senior staff of receiving kickbacks from external service providers paid from its marketing budget, according to people familiar with the matter. 

Adidas said in a statement that “evidence has been found that in the interaction with local vendors, one employee violated the company’s code of conduct. 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.” 

The ongoing investigation, which Adidas is conducting with external advisers, comes as the company is trying to reboot sales in what was a highly profitable and fast-growing market before the Covid-19 pandemic and a consumer backlash over its stance on Xinjiang cotton hit sales. 

In 2021, the German company was embroiled in a nationalist boycott of western brands that spurned cotton from the western region of Xinjiang, where human rights groups alleged they had found evidence of forced labour in the supply chain. China has strenuously denied the claims. 

The sportswear group installed a new leadership team led by Adrian Siu, who was hired back to Adidas from Chinese lingerie market Cosmo Lady in 2022, with a promise to win back the “hearts and minds” of Chinese shoppers. 

The anonymous letter, which was published on Chinese social media earlier this month, alleged that several employees, including a senior manager in the marketing team, received kickbacks from external contractors. Siu was responsible for hiring the manager in question, according to people familiar with the matter. Adidas declined to comment beyond its statement.

The letter accused another senior manager, who works in a different department in China, of having “millions in cash from suppliers, and physical items such as real estate”.

Adidas said in March it expected a rebound in China this year, predicting a double-digit sales growth rate after a 37 per cent surge in the fourth quarter of 2023.