Adidas accused of massive tax evasion in Russia

The German sportswear company reportedly didn’t pay fired staff promised compensation after leaving the country

German sportswear giant Adidas failed to pay 10 billion rubles ($166 million) in taxes in Russia after the company announced plans to quit the country in March, a number of Russian media outlets reported on Monday, citing the Mash Telegram channel.

The non-payment was reportedly revealed by Alexander Khaminsky, the head of the Center for Law Enforcement in Moscow Region, who examined Adidas’ financial records. According to Khaminsky, the company’s Russian subsidiary transferred its stock to local suppliers shortly after it announced its exit plan. 

The Mash Telegram channel claims that the corporation initiated mass layoffs and its former employees received just one fixed payment instead of five that had been promised.

Khaminsky reportedly filed complaints with local authorities and asked Russian Prime Minister Mikhail Mishustin to look into the situation.

READ MORE: Tally of major brands which quit Russia revealed

Adidas halted the operation of its stores and e-commerce site in Russia in early March following similar decisions taken by other athletic-wear makers like Puma and Nike. Back then, the company said it would continue to pay employees in Russia and “take future business decisions and action as needed.” It also suspended its partnership with the Russian Football Union.

Later, Adidas said its decision to leave Russia had reduced its revenues by more than €100 million during the second quarter.

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