Shein’s £50bn London float held up by anti-slavery commissioner and Uyghur marketing campaign group

Shein’s £50billion stock market listing has been held up after the Government’s anti-slavery commissioner and an Uyghur campaign group challenged the plan.

The fast fashion giant is preparing for a London float next year in a boost for the City amid an exodus of companies from the market.

But the move has whipped up controversy due to allegations about forced labour at its suppliers, prompting money managers to warn that London should not become a listing ‘place of last resort’.

And in the latest blow to the online retailer’s plans, the financial regulator has not yet approved the initial public offering.

Based in Singapore, Shein was founded in China and relies on suppliers in the country to manufacture its cut-price T-shirts and dresses.

Human rights organisations have long accused China of abuses in the Xinjiang region, where they say Uyghurs – a mostly-Muslim ethnic group – are forced to work producing cotton and other goods. Beijing has denied any abuses.

More than a fifth of the world’s cotton comes from the region but much is thought to be produced through slave labour, prompting Western brands including H&M and Nike to announce that they would remove the material from their supply chains.

Britain’s Independent Anti-Slavery Commissioner has reportedly raised concerns within the Government, according to Reuters. 

And advocacy group Stop Uyghur Genocide launched a legal challenge in June. It sent the Financial Conduct Authority (FCA) a dossier in August alleging that Shein uses cotton from China’s Xinjiang region.

MPs on the business committee are next month preparing to scrutinise Shein bosses over forced labour concerns.

The retailer is also awaiting approval from China’s securities regulator for its London IPO. Approval would probably come after the FCA’s decision. 

Susannah Streeter, at Hargreaves Lansdown, said: ‘ESG [environmental, social and governance] factors matter because scandal, regulatory fines and consumer appetite impact a company’s profitability and share price.

‘However, there is an argument that investment opportunity lies in transformation.

‘A listing could make the firm more transparent and accountable to shareholders, who could engage with the firm to improve standards.’

Shein declined to respond. It has said it has a zero-tolerance policy for forced labour and is committed to respecting human rights.

Last week the firm announced it had appointed a global external ESG advisory board to bolster its governance ahead of a listing.

And in a sustainability report published in August, Shein said it found two cases of child labour in its supply chain in 2023 but no evidence of forced labour.

Top investment firms have been wary. The UK Sustainable Investment and Finance Association, whose members include Aviva Investors, Schroders and M&G, has said London should not ‘become a listing place of last resort for companies with poor human rights records’.

The British Fashion Council has warned that the planned float is a ‘significant concern’.

But Julia Hoggett, the boss of the London Stock Exchange, has previously dismissed the backlash – saying the criticism does not make sense. Hoggett declined to comment directly on the company and criticism of it.

However, she said: ‘If companies wish to come to our market, meet our standards and adhere to the level of governance standards that we have then I think the UK has the potential to be the home for them to raise capital.’ 

Shein’s attempts to float in New York hit regulatory hurdles and opposition from legislators, who wanted it to verify it did not use forced labour.