LONDON (Reuters) – Fast fashion retailer Shein’s plans to list in London face a challenge from a group campaigning against forced labour in China, which said on Monday it would apply for a judicial review of the IPO if Britain’s regulator approves the flotation.
The group, Stop Uyghur Genocide, claims the retailer’s supply chain in China includes cotton produced by Uyghur forced labour. Its plan to apply for a judicial review could increase pressure on Britain’s Financial Conduct Authority, though it faces a high bar to succeed.
The FCA said it cannot comment on potential listings. Shein said it strictly prohibits forced labour in its supply chain globally.
The online retailer aims to list in London in the first half of this year if it gains regulatory approvals, two sources with direct knowledge told Reuters last month.
In a similar challenge to an IPO in 2023, environmental law group ClientEarth applied for a judicial review after the FCA approved oil producer Ithaca Energy’s flotation, but the High Court denied the application saying it could not be proved the FCA had failed to disclose material risks.
The U.S. government and rights groups say Uyghur minority people are subject to abuses including forced labour in internment camps set up by the Chinese government in the Xinjiang region. China denies any abuses.
Xinjiang produces around 80% of China’s cotton and accounts for a fifth of global cotton production, exposing most global apparel retailers and brands to this risk.
In written evidence to UK lawmakers, Shein said it only allows cotton from approved regions, which do not include China, for its products sold in the U.S., its biggest market, as part of its compliance with the U.S. Uyghur Forced Labour Prevention Act (UFLPA), which prohibits the import of products made in Xinjiang or made by designated banned companies.
Shein did not specify whether its restrictions on cotton sources applied to products sold in other markets, such as the UK.
The retailer does not prohibit the use of Chinese cotton in its products where such use would not breach relevant laws and regulations, it added.
(Reporting by Helen Reid; Editing by Susan Fenton)
