Shein IPO reportedly facing regulator delays due to NGO concerns

Financial regulators in the UK have delayed their approval of Shein’s IPO after it faced challenges from advocacy groups with anti-slavery stances. According to sources for Reuters, the Financial Conduct Authority (FCA) is believed to be checking the fast fashion giant’s supply chain oversight and assessing possible legal risks in relation to the listing.

It comes after an advocacy group for China’s Uyghur population, Stop Uyghur Genocide (SUG), legally challenged the potential IPO that was initially filed back in June. In a dossier sent to the FCA in August, the organisation claimed that Shein utilised cotton from China’s Xinjiang region, which has been subject to allegations of forced labour against minority groups.

Related concerns have further been raised by the UK’s Independent Anti-Slavery Commissioner, which additionally cited claims regarding labour practices at Shein’s suppliers. Shein is also currently waiting for approval from Chinese securities regulators for the IPO, Reuters reported, with such approval expected to come following the FCA’s decision.

Shein’s IPO, which it is hoping to launch in the first quarter of next year, has faced continued scrutiny in the UK, a market it had shifted its attention to following similar backlash in the US. Both human rights organisations and UK politicians have since banned together to urge that the listing be halted in its tracks over concerns regarding a lack of transparency and resulting environmental issues believed to be tied to Shein’s supply chain.