"Human rights group urges UK financial regulator to block Shein’s LSE flotation", 26 Jun 2024

A human rights group has urged Britain’s financial regulator to block the Chinese fast-fashion retailer Shein’s planned blockbuster flotation on the London Stock Exchange.

Stop Uyghur Genocide, a UK-based human rights charity that alleges minority Uyghur people are being used as forced labour at some of Shein’s cotton suppliers in China’s north-western Xinjiang region, has begun a legal campaign against the planned stock market listing.

Represented by the law firm Leigh Day, the campaign group has written to the Financial Conduct Authority (FCA) to argue that “any attempt by Shein to list on the LSE should be refused”...

The fast-fashion retailer said on Wednesday: “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.”

Stop Uyghur Genocide said it had reminded the FCA that its US counterpart, the Securities and Exchange Commission, has already refused to recommend the listing of Shein for trading on the US stock exchange because of concerns around labour practices in the company’s supply chains.

The group said the London listing should not be allowed to go ahead because the UK has signed up to International Labour Organization conventions, which set out minimum standards for engaging workers. Any concerns about companies engaging workers in their supply chains that may breach those minimum standards are inconsistent with the UK’s convention obligations, it said...

Stop Uyghur Genocide said it was concerned about the London Stock Exchange’s ability to detect and respond to any alleged forced labour in Shein’s supply chains.

Stop Uyghur Genocide is preparing a detailed submission to the regulator to support its letter.

In the meantime, the campaign group’s lawyers have asked the FCA to obtain more information from Shein about the “accuracy of its published modern slavery statement”...

Leigh Day lawyers have urged the regulator to “refuse Shein’s listing application unless the FCA is satisfied that its products are not tainted by forced labour”...

The FCA declined to comment on Shein’s potential listing. It noted that it has no investigation or enforcement powers relating to alleged breaches of legislation not within its remit, such as the Modern Slavery Act or tax legislation.

Before a company’s shares can be admitted to the LSE, the firm must apply to the FCA for admission to listing and to approve its prospectus. The watchdog said it was the company’s responsibility to ensure the information in its prospectus is accurate, and not the FCA’s role to independently verify the accurate of information...