When German athleticwear giant Adidas pulled out of Russia in March, the company failed to pay 10 billion rubles ($166 million) in Russian taxes it owed, according to reports from a number of Russian media outlets.
Alexander Khaminsky, the head of the Center for Law Enforcement in Moscow Region, revealed the non-payment after reviewing the financial records of the company. Khaminsky said the company transferred its stock to local suppliers immediately after announcing its exit plan.
According to a report on the Mash Telegram channel, the company also cheated its workers, when it initiated mass layoffs as it prepared its exit. Former employees were told they would receive five severance payments from the company, but instead they were only paid one.
Khaminsky drafted official complaints with local authorities and has requested that Russian Prime Minister Mikhail Mishustin investigate the situation.
In early March, Adidas halted operations of its stores and ecommerce site in Russia, after similar halts were performed by other athleticwear companies like Puma and Nike. In addition, it suspended its partnership with the Russian Football Union. The company said at the time it would continue to pay its employees, and, “take future business decisions and action as needed.”
The company would later report that its decision to exit the Russian market reduced second quarter revenues by more than €100 million.
The Daily Financial Trends
