Shares of PVH Corp (NYSE:) fell 10% after a Chinese investigation found that the apparel maker may have been involved in inappropriate activities related to Xinjiang. The preliminary investigation, which began on September 24, 2024, has raised concerns over PVH Corp’s potential involvement in human rights issues in the region.
The Chinese government’s unreliable entity list mechanism has been used to address foreign entities that threaten national security, and PVH Corp is one of the companies under investigation. The company has been reviewed and provided written statements, but the findings suggest improper conduct, according to Chinese officials.
The news has significant implications for PVH Corp, which relies heavily on Chinese markets and supply chains. The company’s stock performance has been overshadowed by the investigation, leading to a sharp decline in its value. The outcome of the investigation could have far-reaching implications for the company’s business and reputation.
The Chinese government has assured foreign investors that it handles the unreliable entity list prudently, targeting only a small number of entities that pose a threat to national security. It has also emphasized its commitment to providing a stable, fair, and predictable business environment for foreign investments in China. However, the preliminary findings have raised concerns among investors and stakeholders, and the company has yet to respond publicly to the allegations.
