Adidas is investigating allegations of embezzlement and kickbacks in China

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Adidas says it has started an investigation into allegations of “compliance violations” in China, a key market for its sportswear.

Chinese state media Jiemian reported last week that local executives had been accused of embezzling “millions of euros” in an unsigned letter written by whistleblowers calling themselves employees of Adidas China. The letter was widely publicized online.

Claudia Lange, head of media relations at the apparel giant, told CNN on Monday that it had received an anonymous letter on June 7 “indicating potential compliance violations in China.”

“Adidas is currently intensively investigating this matter together with external legal counsel,” she said in an emailed response. Lange declined further comment pending the outcome of the inquiry.

Shares of Adidas fell 3.7% on Monday.

Jiemian wrote that the letter from whistleblowers had been sent directly to the company’s German headquarters before being shared on social media.

The reported complaint alleged that a senior executive in Greater China who manages Adidas’ marketing budget had embezzled millions of euros and taken huge kickbacks from external advertising and celebrity agencies. Several members of the executive’s team and other employees were also implicated, according to a copy of the letter published by the Chinese state media outlet.

Adidas Greater China’s overall promotional budget amounted to 250 million euros ($268 million) a year, including expenses dedicated to marketing, branding and trade fairs, Jiemian reported,citing the letter.

The senior manager was also