The London Stock Exchange’s boss has dismissed a backlash against controversial plans for Shein to list in London – saying the criticism does not make sense.
Julia Hoggett was responding to claims that the UK risked becoming a ‘last resort for companies with poor human rights records’ if it opens the door to a £50billion float by the online Chinese giant.
Hoggett declined to comment directly on the company and criticism of its working practices.
But she said: ‘If companies wish to come to our market, meet our standards and adhere to the level of governance standards that we as a UK market have then I think the UK has the potential to be the home for them to raise capital.’
Shein could file papers for an initial public offering (IPO) in London this week in a major boost for the City after a drought of companies going public.
Human rights fears: LSE boss Julia Hoggett (pictured) hit back at claims that the UK risked becoming a ‘last resort for companies with poor human rights records’
Its previous attempts to float in New York hit regulatory hurdles and opposition from legislators, who have called for the listing to be blocked unless it could verify that it did not use forced labour.
Based in Singapore, Shein was founded in China and relies on suppliers in the country to manufacture its cut-price T-shirts and dresses.
Some UK retail rivals have concerns about a London IPO giving a green light for the company to do more business in Britain.
Shein has said it is investing millions in ‘strengthening governance and compliance across our supply chain’.
But the plans for a London float have prompted an outcry from the likes of fund manager CCLA, which warned of the risk of the UK market ‘lowering its standards’ to allow in companies ‘with questions hanging over them’.
But Hoggett told the Mail: ‘I don’t understand that narrative.’
She pointed out that any company listing in London would have to meet a host of regulatory standards and an investor base ‘with a significant amount of focus on ESG [environment, social and governance]’ standards.
She said: ‘Eligibility requirements in the UK are set by our regulators at high standards and the ongoing requirements in the UK are at least as high, particularly regarding corporate governance and ESG as anywhere else, arguably higher than they are in the US.
‘So it’s hard to see how that argument makes sense. We run a pretty tight ship in the UK but it is a rules-based ship. It is not subject to non-regulatory evaluations. That has always been one of the strengths.
‘The [City watchdog] FCA has a set of rules to apply and they’ll apply them and they’ll do it without fear or favour. That is the principle and that’s how sustainable, predictable, credible markets operate.’
Peter Hugh Smith, chief executive of CCLA Investment Management, said the listing was ‘problematic and risks doing harm’.
‘Anyone with a pension fund will be passively implicated their actions through the allocation of capital,’ he said.
The UK Sustainable Investment and Finance Association, a group of top fund managers, has warned of London becoming a ‘last resort’.