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Chinese-founded Shein’s work practices face scrutiny ahead of possible UK listing

Chinese-founded Shein’s work practices face scrutiny ahead of possible UK listing
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Senior British lawmakers, including the chairs of three parliamentary committees, have questioned fast-fashion giant Shein’s suitability for a London stock market listing and called for greater scrutiny of the Chinese-founded firm.

Shein is stepping up preparations for a London listing after its attempt to float in New York faced regulatory hurdles and resistance from US lawmakers.

The firm, known for its US$10 tops and US$5 biker shorts, faced criticism from US lawmakers over alleged labour malpractices, lawsuits from competitors, and use of an import tax exemption.

British Finance Minister Jeremy Hunt held talks with Shein’s Executive Chairman Donald Tang in February and the firm is keen to list in London, a UK government source told Reuters.

Britain is keen to attract more listings after losing out on some big-name flotations to other financial centres.

However, Alicia Kearns, the Conservative chair of parliament’s Foreign Affairs Committee, said Shein should not be permitted to list in London.

The Shein Group headquarters in Singapore. Photo: Bloomberg

“With Shein’s prices so low, the London Stock Exchange needs to ask itself whose suffering is subsiding those prices,” she said in comments first reported by The Guardian newspaper.

“A company which has failed to make full disclosures about its supply chains as required by UK law, and where there are grave concerns about its factory working conditions, has no place in London.”

Sarah Champion, the Labour chair of the International Development Committee, said serious concerns had been raised about Shein’s labour practices.

“No company using modern slavery should be listed in London. Unless the allegations around Shein are addressed, we should not support their application,” she said.

A spokesperson for Shein said: “SHEIN is investing millions of pounds in strengthening governance and compliance across our supply chain.”

“Our regular supplier audits are showing a consistent improvement in performance and compliance by our supplier partners. This includes improvements in ensuring that workers are compensated fairly for what they do.”

Shein’s Modern Slavery Statement is available on its UK website as required by law, the spokesperson added.

People queue outside the first permanent showroom of Chinese online fast fashion giant Shein on the opening day of the shop in Tokyo. The firm is seeking to list in London, but could face more scrutiny from UK lawmakers. Photo: AFP

Liam Byrne, the Labour chair of the Business and Trade Committee, expressed concern that parliament’s dissolution for a July 4 general election meant Shein’s initial public offering might not get the necessary scrutiny.

“It is not ideal that Shein’s floating in London could get the green light without parliamentary scrutiny,” he said.

“Parliament needs to satisfy itself that the concerns raised recently by the US Congress of forced labour in Shein’s supply chains have been thoroughly addressed.”

Alistair Carmichael, the Liberal Democrat chair of the all-party parliamentary group on Uygurs – a mainly Muslim minority group in China – also called for a closer examination of Shein.

“When it comes to a company like Shein and whom it uses in its labour and supply chains in China, we need more serious scrutiny,” he said.

The spokesperson for Shein added: “As a global company serving customers across more than 150 countries, we believe it is healthy to attract scrutiny and transparency, and we want to be held to the highest standards.”

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