Nike Inc. share prices slipped as much as 3.5 percent today after news broke over the weekend that the athletic giant was at the center of a corruption investigation in Kenya.
According to a New York Times report, Nike is under scrutiny for a 2011 “commitment bonus” of $500,000 paid to Kenyan officials with the aim of continuing to outfit Athletics Kenya, the national runners federation for the country. The Times said the half-million-dollar payment was immediately withdrawn and kept off the books.
The payment is being characterized by whistleblowers as a bribe Nike paid to athletic officials to maintain its contract to outfit, support and train Kenyan athletes. At the time, Nike learned of a Chinese company looking to sponsor the national Kenya runners organization. Nike responded by expanding its commitment and contract with the association.
According to the report, Nike so far has refused to provide more information or comment for investigators.
In the New York Times story, one investigator even goes as far to say, ” ‘Why was such a huge sum of money paid as commitment?’ said one of the detectives, who spoke on the condition of anonymity because he was not authorized to speak publicly. ‘It’s only Nike who can tell us.’ “
Footwear News has reached out for comment from Nike.
Nike shares closed down 3.28 percent to $59.25 per share.