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A UK human rights organization has launched a legal campaign to prevent online fast-fashion group Shein from successfully listing on the London Stock Exchange.
Stop Uyghur Genocide, which alleges minority Uyghur groups are being used as forced labor in Shein’s cotton supply in China’s northwestern Xinjiang region, this week urged the Financial Conduct Authority, Britain’s financial regulator, to block Shein’s application , challenging its possible listing on the Chinese market. legal grounds.
“Any attempt by Shein to get on the list [London Stock Exchange] must be refused,” said a statement from British law firm Leigh Day, which represents Stop Uyghur Genocide. The statement added that the FCA had a “statutory duty of integrity and to protect its investors”.
Leigh Day has not cited specific evidence to support the claim that forced labor is used in Shein’s supply chain.
A letter from Leigh Day to the FCA, seen by the Financial Times, says allowing the list would breach Britain’s obligations to the International Labor Organization, a UN body that protects labor standards.
The letter also urges the FCA to require Shein to provide additional information “regarding the accuracy of the published modern slavery statement”.
Under the Modern Slavery Act, major companies in Britain must publish a statement every year setting out the steps they have taken to ensure slavery and human trafficking do not take place in their operations or supply chains.
China-founded Shein, which could command a market value of around £50 billion, filed confidential initial public offering paperwork with the FCA earlier this month, moving it a step closer to a London stock exchange listing following the company’s decision to to abandon a planned IPO in New York. .
That followed a barrage of criticism in the US, where China hawks including Republican Senator Marco Rubio lobbied the securities regulator to reject Shein’s IPO application if the company did not agree to extensive disclosures. Any inclusion on the list would have to be approved by Chinese authorities, as the majority of Shein’s workforce and production are based in the country.
Shein privately tried to convince US politicians and regulators that their products did not contain Xinjiang cotton, but shied away from making public statements referencing the region for fear of angering Beijing, the Financial Times previously reported.
The US has banned the import of cotton and other products from
“Stop Uyghur Genocide expects UK financial institutions to uphold the high ethical standards to which they pay lip service and to make it clear that London is not the place for a ‘no questions asked’ approach to capital,” said Leigh Day lawyer Ricardo. Gama, representing Stop Uyghur Genocide.
“At a minimum, regulators must ensure that the laws in place to eradicate modern slavery are enforced,” he added.
The possible IPO of Shein would be a much-needed boost to the British market. Senior politicians including Conservative Chancellor Jeremy Hunt and Labour’s shadow business secretary Jonathan Reynolds have met with figures from the company in recent months.
Labour, which leads the polls ahead of the July 4 general election, has argued that London should welcome a Shein flotation because it would impose higher regulatory standards on the company than elsewhere.
The FCA declined to comment on Stop Uyghur Genocide’s legal brief.
Shein, whose headquarters are in Singapore, said: “Shein has a zero-tolerance policy towards forced labor. We take visibility across our entire supply chain seriously and are committed to respecting human rights. We require our contract manufacturers to source cotton only from approved regions.”
It added: “We pay manufacturing suppliers competitive rates so they can pay fair wages to their workers.” Shein said an independent audit of 4,000 workers in supplier factories in China found they earn on average twice the local minimum wage.