The approval of Shein’s IPO has been delayed due to unanswered questions around its supply chain and legal risks as a result of challenges by a new advocacy group for China’s Uyghur population.
Sources said The Financial Conduct Authority (FCA) is checking Shein’s “supply chain oversight and assessing legal risks”, according to Reuters.
Britain’s Independent Anti-Slavery Commissioner, a monitoring body of the interior ministry, is also understood to have raised concerns with the government over the highly-anticipated IPO after allegations about “labour practices” at some of its suppliers.
Shein is also awaiting the approval of China’s securities regulator for the London listing to get the green light, and other sources said the approval is only likely to come after the FCA’s decision.
Advocacy group Stop Uyghur Genocide (SUG) announced a legal challenge earlier this year and sent the FCA dossier in August claiming that Shein uses cotton from the Xinjiang region in China.
Despite China having been long accused of “human rights abuses” in the Xinjiang region, where they say Uyghurs are “forced to work producing cotton and others goods”, Beijing has denied any abuses in the region.
A Shein spokesperson told Reuters that the fashion giant has a “zero-tolerance policy for forced labour and is committed to respecting human rights”.
Retail Week has contacted Shein for comment.
This comes after it was reported last month that Shein is preparing to launch its £50bn IPO on the London Stock Exchange in early 2025.
Shein’s decision to list in London follows hurdles previously faced with US regulators which demanded a public filing.
If Shein successfully lists in London, the IPO could become one of the London Stock Exchange’s largest deals in recent years.
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