MPs sound alarm over reports Shein is pushing UK listing rules to be relaxed
The cross-party Business and Trade Committee said it would be 'deeply concerned' by any changes to the disclosure requirements following reports that Shein had privately filed to list its shares on the Hong Kong stock exchange.
It is thought the move was partly made in a bid to apply pressure on regulators to approve plans and water down disclosure rules to allow it to list on the London Stock Exchange (LSE), with Shein's bosses said to remain hopeful a UK flotation can be kept alive.
In a letter to the Financial Conduct Authority (FCA), committee chairman Liam Byrne said: 'For the avoidance of doubt, I want to flag that the Committee would be deeply concerned by any watering down of disclosure requirements, especially in cases involving potential violations of international human rights standards.
'This would not only compromise the integrity of the UK's listing regime but could also risk reputational damage to the UK's financial markets and undermine investor confidence that the UK was determined to champion only the highest international labour standards, along with our allies in the United States and the European Union.'
Shein has been looking to float on the LSE for more than a year, but has struggled to get the go-ahead from Chinese regulators for the move, including the China Securities Regulatory Commission.
This is despite it reportedly securing approval for the listing from the FCA in March.
If Shein launched an initial public offering (IPO) in the UK, it is widely thought to mark one of the biggest deals for the stock exchange in a decade.
The Chinese-founded company, which is now based in Singapore, has disrupted the fast-fashion industry by shipping cheap clothes direct from factories in China to UK and US-based shoppers.
However, its efforts to float on the public markets have faced a variety of obstacles, including political pressure in the UK over alleged supply chain and labour abuses.
This is believed to be a key sticking point between UK and Chinese regulators failing to agree on appropriate language in the risk disclosure part of the listing prospectus.
The Commons committee of MPs is asking the FCA to confirm whether it has been in talks over this matter and whether the disclosure risks are a 'material factor in any delay to Shein's listing'.
It also wants to know what steps the FCA is taking to 'safeguard the robustness of disclosure standards in this and comparable cases'.
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