London Stock Exchange Facing Questions Over Checks on Companies Listing
The chair of a British parliamentary committee has written to the London Stock Exchange (LSE) to raise concerns about the evidence given by a Shein representative at a recent hearing, and to ask how the exchange checks statements by firms looking to list. Shein, an online fast-fashion retailer, 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 a letter to LSE CEO Julia Hoggett, committee chair Liam Byrne expressed concerns about Shein’s lack of response to lawmakers’ questions about its supply chain at a hearing this week. Byrne asked what checks the LSE has in place to authenticate statements by firms seeking to list, with particular regard to their safeguards against the use of forced labor in their products.
The committee’s concerns come amid allegations that Shein sources cotton from China’s Xinjiang province, where there have been accusations of forced labor and human rights abuses. Shein has said it has a zero-tolerance policy for forced labor and requires contract manufacturers to only source cotton from approved regions.
Byrne also wrote to Britain’s Financial Conduct Authority (FCA), which is responsible for assessing and approving stock market listings, asking how it ensures all legal risks are disclosed prior to an IPO. The FCA said it would respond to the committee, while the LSE confirmed receipt of the letter and is preparing a response.
Shein has declined to comment on the letters. The company has faced repeated questioning over its supply chain, and its refusal to answer questions about its sources has been described as “bordering on contempt” by the committee. A visit by British officials to China this weekend may help progress regulatory approvals for Shein’s planned IPO.