Adidas Bribery Allegations Lead To Staff Exits In China

Adidas AG ADDYY has recently experienced significant internal turmoil. Two of its employees in China departed amid an ongoing corruption investigation within the company.

The inquiry began after Adidas received an anonymous letter on June 7 alleging misconduct and compliance violations by certain staff members in its China operations.

The probe quickly identified one employee who breached the company's conduct code in dealings with local vendors, according to Bloomberg. This led to their departure.

Another employee was found to have fallen short of Adidas's leadership standards, particularly in fostering mutual respect and trust among colleagues.

This finding resulted in the second dismissal as the company continues to uphold its internal ethical standards.

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The scandal garnered public attention when screenshots of the incriminating letter circulated across social media and news websites in China.

The letter accused Adidas employees of accepting kickbacks from external service providers, with one senior manager allegedly receiving substantial bribes from suppliers, including cash and real estate.

The brand faced significant setbacks from 2019 to 2022 due to stringent lockdown measures and a consumer boycott stemming from the brand's stance on sourcing materials from Xinjiang amid accusations of forced labor practices in the region.

Adidas increased its full-year revenue guidance and sees currency-neutral revenues increasing at a mid- to high-single-digit rate in 2024, up from the previous mid-single-digit rate growth.

Price Action: ADDYY shares are trading higher by 1.62% at $118.76 at last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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