The London Stock Exchange (LSE) has asked what checks are in place to vet companies after fast fashion retailer Shayne refused to answer “fundamental questions” about its supply chain. I was asked if it was.
Liam Byrne, chairman of the Business and Trade Committee, has written to Dame Julia Hoggett asking whether tests have been introduced on the stock market to “authenticate the statements” of companies seeking to list, asking “particularly if forced labor Regarding safeguards against the use of their products.”
This comes after MPs branded Shein’s evidence “ridiculous” after she refused to say whether the company sells products containing cotton from China. That’s true.
Mr Byrne told Julia that MPs were “deeply concerned about the lack of frank and open answers”.
“The committee would like to draw your attention to the worrying evidence we have heard,” he said in a letter to the LSE chief executive on Friday.
The BBC understands that Shein, which was founded in China and is now headquartered in Singapore, has filed initial documents to list in the UK, with a potential valuation of £50bn. . It follows the story of how the retailer quickly became one of the world’s largest fast fashion companies, shipping products to customers in 150 countries.
But questions remain about the company’s supply chain amid allegations of forced labor and human rights abuses.
During an appearance before the House Commerce and Trade Committee on Tuesday, Yinan Chu, a senior lawyer representing Shein, repeatedly questioned whether the company had sold products containing cotton from China’s accused Xinjiang region. refused to speak. Subjecting Uyghur Muslims to forced labor. Mr. Shayne denies this allegation.
Zhu refused to answer and asked if she could write a letter to the committee after the hearing.
Her repeated refusals to answer questions about the supply chain and a potential UK listing faced a backlash from a parliamentary committee, which accused her of “willful ignorance”.
He told lawmakers that Shine does not own factories or manufacturing facilities and works with a large network of suppliers, primarily in China but also in Turkey and Brazil.
He added that the company complies with “the laws and regulations of the countries in which it operates.”
China has been accused of subjecting the Uyghur population, a predominantly Muslim ethnic minority, to forced labor. An investigation seen by the BBC in December 2020 showed that up to 500,000 people were forced to pick cotton in Xinjiang, although the Chinese government denies any rights violations.
The allegations have led to some major fashion brands, including H&M, Nike, Burberry and Adidas, to remove products made from Xinjiang cotton, leading to a backlash in China and a corporate boycott.
In a letter to LSE, Labor MP Mr Byrne said: “The committee is deeply struck by the lack of frank and open answers to very simple and fundamental questions about the integrity of Shane’s supply chain. I was concerned,” he said.
“In light of this, I would appreciate it if you could tell me what checks, if any, the London Stock Exchange has in place to authenticate the statements of companies seeking to list, particularly with regard to safeguards against the use of forced labor. ” in their products. ”
LSE told the BBC it would respond to the commission’s letter “in due course”.
Mr Byrne has also written to Nikhil Rati, the head of the Financial Conduct Authority (FCA), asking how the watchdog itself should ensure that UK listed companies disclose “legal risks”. I asked them if they carried out any such checks. It is understood that the FCA sets the listing rules for the London Stock Exchange.
Mr. Shein has been contacted for comment following the letter.
