A UK-based human rights group is calling on the Financial Conduct Authority (FCA) to block Shein’s application to list on the London Stock Exchange amid concerns about its labour practices.
Stop Uyghur Genocide, alleged that minority Uyghur people are being used as forced labour in the Chinese fashion giant’s cotton supply in China’s north-western Xinjiang region, and is calling on the financial regulator to refuse the application on legal grounds, the Financial Times reported.
A statement, published by law firm Leigh Day that is representing the group, said: “Any attempt by Shein to list on the [London Stock Exchange] should be refused.”
The statement added that the FCA had a “statutory duty of integrity and to protect its investors”.
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Leigh Day solicitor Ricardo Gama said: “Stop Uyghur Genocide expects UK financial institutions to uphold the high ethical standards that they pay lip service to and to make clear that London isn’t the place to come for a ‘no questions asked’ approach to capital.
“At the very minimum, regulators must make sure that laws in place to root out modern slavery are complied with,” he added.
A Shein spokesperson told the FT: “Shein has a zero-tolerance policy for forced labour. We take visibility across our entire supply chain seriously and we are committed to respecting human rights. We require our contract manufacturers to only source cotton from approved regions.”
“We pay manufacturing suppliers competitive rates so they can pay fair wages to their workers.”
Shein said an independent audit of 4,000 workers at supplier factories in China found that they earn on average twice the local minimum wage.
The fast-fashion retailer confidentially filed papers with Britain’s markets regulator in June, two sources told Reuters at the start of this week, kicking off the process for a potential London listing later this year.
However, the blockbuster prospective float has caused controversy. Earlier this week, Amnesty International said a Shein IPO would be a “badge of shame” for the London Stock Exchange.
Dominique Muller, an Amnesty International researcher specialising in the garment industry, said: “The UK authorities and the London Stock Exchange should not facilitate Shein’s listing until transparent and binding safeguards regarding internationally accepted human rights standards covering its entire supply chain are agreed and applied, and any abuses identified fully remedied.
“Rewarding Shein’s current methods via a flotation would be a badge of shame for the London Stock Exchange, the bankers helping bring it to market, and any investors set to profit from it.”
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