LONDON (Reuters) -The chair of a British parliamentary committee wrote on Thursday to the London Stock Exchange to raise concerns about evidence given by a Shein representative at a hearing this week,
UK Lawmaker Raises Concerns Over Shein's London IPO Plans
LONDON (Reuters) -The chair of a British parliamentary committee wrote on Thursday to the London Stock Exchange to raise concerns about evidence given by a Shein representative at a hearing this week, and to ask how the exchange checks statements by firms looking to list.
The lack of response by Shein's general counsel for Europe, the Middle East and Africa Yinan Zhu to lawmakers' questions about its supply chain at Tuesday's hearing made the committee "profoundly concerned", chair Liam Byrne said in the letter to the LSE CEO Julia Hoggett, published on Friday.
Online fast-fashion retailer Shein is working towards a London IPO in the first half of this year but has faced scrutiny over its mainly China-based suppliers and working practices.
In the letter Byrne asked "what checks, if any, the London Stock Exchange has in place to authenticate statements by firms seeking to list, with particular regard to their safeguards against the use of forced labour in their products."
Byrne also wrote to Britain's Financial Conduct Authority, which is in charge of assessing and approving stock market listings such as Shein's, asking it how it ensures all legal risks are disclosed prior to an IPO.
“We look forward to setting out our role in our reply to the Committee,” the FCA said.
An LSE Group spokesperson confirmed it received the letter and said it is preparing a response.
Shein declined to comment on the letters.
In Tuesday's hearing, when pressed on whether Shein sources cotton from China, Zhu did not answer, and asked the committee for permission to send responses in writing.
Her repeated refusal to answer questions "bordered on contempt" for the committee, Byrne said at the time.
Shein has faced allegations that its clothes contain cotton from China's Xinjiang province, where the U.S. and NGOs have accused the Chinese government of forced labour and human rights abuses. Beijing denies any abuses.
Shein has previously said that it has a zero-tolerance policy for forced labour and requires contract manufacturers to only source cotton from approved regions.
A visit to China by Britain's finance minister Rachel Reeves, FCA Chief Nikhil Rathi, and other officials this weekend to discuss economic and financial cooperation could help progress the regulatory approvals Shein needs, a source told Reuters on Thursday.
To list in London, Shein needs approval from the FCA, but it has also sought permission from the China Securities Regulatory Commission, making it subject to offshore listing rules, as most of its 5,800 contract manufacturers are in China.
(Reporting by Helen Reid, Editing by Matt Scuffham and Louise Heavens)
