Shein faces legal challenge over London IPO plans

In the wake of objections from Amnesty International, UK-based human rights group Stop Uyghur Genocide has launched a campaign attempting to block fast-fashion firm Shein’s prospective London listing.

The organisation, represented by human rights law firm Leigh Day, has written to the Financial Conduct Authority (FCA) urging the regulator to block any attempt by Shein to list in London.

This move follows reports from that Shein has confidentially filed papers with British market regulators, initiating the process for a potential London initial public offering (IPO) later this year.

The campaign comes amid growing scrutiny of Shein's business practices. Amnesty International UK earlier this week described the potential LSE listing as a "badge of shame", highlighting the company's "questionable" labour and human rights standards.

Dominique Muller, an Amnesty International researcher specialising in the garment industry, expressed deep concern about the flotation. "It's deeply troubling that a company with questionable labour and human rights standards and an unsustainable fast fashion business model could be set to reap hundreds of millions of pounds via a sale of shares and a listing on the London Stock Exchange," Muller stated.

Critics argue that Shein's business model, which involves subcontracting garment manufacturing to smaller producers in China, lacks transparency and accountability regarding workers' pay and conditions. The company has faced accusations of worker exploitation, including reports of employees receiving less than 4 US cents per garment produced, and allegations of using cotton harvested by forced labour.

In response to these concerns, the company stated, "Shein has a zero-tolerance policy for forced labour and we are committed to respecting human rights. We take visibility across our entire supply chain seriously and we require our contract manufacturers to only source cotton from approved regions."

However, human rights groups are calling for more substantial changes and greater transparency. They urge UK authorities to prevent a "race to the bottom" in corporate and human rights standards by requiring companies to prevent serious environmental harms and human rights abuses throughout their operations and supply chains.

As the potential IPO moves forward, the outcome of this legal challenge could have significant implications for the future of corporate responsibility in global financial markets. The FCA has declined to comment on the matter.

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