What’s new: German sportswear giant Adidas AG said two employees from its China operation have left the company after a whistleblower letter prompted an internal investigation into alleged misconduct.
An employee from Adidas China’s marketing department was dismissed after the investigation found evidence of violations in the company’s code of conduct in dealings with local vendors, according to a company source.
A senior marketing executive also left for “failing to meet the company’s leadership expectations of demonstrating mutual respect and trust,” said the source.
An Adidas China spokesman told Caixin the company will further enhance training in communication and compliance, adding the incident will not affect Adidas’ marketing activities in China.
Background: Earlier this month, Adidas launched an investigation on its China operations after receiving an anonymous letter exposing potential compliance violations by some employees.
The letter, which went viral on China’s social media, claimed to have been written by “employees from Adidas China,” and criticized several employees and managers for embezzling Adidas’s China marketing budget and taking kickbacks from suppliers.
The incident is another blow to Adidas, which has faced a series of crises in the past few years, including consumer boycotts in China.
Adidas China, which oversees the German company’s business in the mainland, Hong Kong, Macao and Taiwan, posted 900 million euros ($965 million) in sales during the first quarter, up 8% from a year ago. It marked the fourth quarter of growth since Adidas gave its Chinese staff more autonomy last year to create products for their home market and as marketing restrictions eased after Covid.
Contact reporter Han Wei (weihan@caixin.com)
