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

Shein’s £50bn stock listing has been delayed after the government’s anti-slavery commissioner and a Uyghur campaign group challenged the plan.

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

But the move has sparked controversy over allegations of forced labor at its suppliers, prompting money managers to warn that London should not become a “place of last resort” on the list.

And in the latest blow to the online retailer’s plans, the financial regulator has yet to approve the initial public offering.

Based in Singapore, Shein was founded in China and relies on suppliers in the country to make its T-shirts and dresses at discounted prices.

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

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

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

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

Business committee MPs will prepare next month to scrutinize Shein bosses over concerns about forced labour.

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

Susannah Streeter, of Hargreaves Lansdown, said: ‘ESG (environmental, social and governance) factors are important because scandals, regulatory fines and consumer appetite impact a company’s profitability and share price.

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

“A listing could make the company more transparent and accountable to shareholders, who could work with the company to improve standards.”

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

Last week, the company announced that it had appointed a global external ESG advisory board to strengthen its governance ahead of going public.

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

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

The British Fashion Council has warned that the planned float is a “major concern”.

But Julia Hoggett, head of the London Stock Exchange, has previously dismissed the backlash, saying the criticism is nonsense. Hoggett declined to comment directly on the company and its criticisms.

However, he said: “If companies want 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 list in New York ran into regulatory hurdles and opposition from lawmakers, who wanted verification that it did not use forced labor.