The Shareholders of Adidas have filed a class action against the
giant sportswear brand over the costly failure of the company’s partnership
with popular rapper, Kanye West.
In the suit filed on Friday at a Portland U.S. District
Court, the shareholders alleged that the company’s executives were aware of the
risks posed by West’s behaviour years before the eventual fall-out, but took no
precautionary measures, NBC news reports.
“In the Personnel Risk section of the 2018 Report’s
discussion of risk, the Company extolled its commitment to having an equitable
workplace, and its strategic workforce management process, known as ‘People
Strategy’, while failing to discuss how it routinely ignored extreme behaviour
from Kanye West,” the suit read in part.
Referencing a November 2022 Wall Street Journal report, The
plaintiffs further stated that Adidas’ former chief executive officer, Kasper
Rorsted, and chief financial officer, Harm Ohlmeyer, either “intended to
deceive” investors or “acted with reckless disregard for the truth” by keeping
shareholders in the dark regarding issues between the company and the rapper.
Quoting people familiar with the matter, the WSJ report
revealed that the company’s chief executive and senior officers in Germany
discussed as far back as 2018, the risks of maintaining a relationship with the
‘Monster’ rapper, which they feared could blow up at any moment.
Back in 2018, West had also made incendiary statements
regarding slavery. During an interview with TMZ, the rapper stated that 400
years of slavery endured by black people in America “sounds like a choice”.
Shareholders further blamed the executives for not
specifically stating in annual reports “that the Company had actually
considered ending the Partnership as a result of West’s personal behaviour, or
how the Company’s reputation might be affected if his behaviour, as it related
to the Company, were to become public.”
The German brand finally cut ties with Ye in October last
year following a series of anti-semitic statements he made via various media
platforms last year. The company came under intense pressure from the public
after the artiste doubled down on his remarks despite initial backlash and bans
from social media platforms.
The failed Yeezy partnership cost both parties a great deal, as West lost his billionaire status last year. In February, Adidas also revealed that the discontinuation of the fashion collection would cost the brand $1.3 billion in sales this year.