Senior Labor MP raises ‘concerns’ with city watchdog over proposed Schein list

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The chair of a cross-party group of MPs has written to the UK financial regulator and London Stock Exchange officials ahead of a planned IPO of fast fashion group Sheen.

Liam Byrne, chairman of the House of Commons trade and business select committee, said after MPs questioned the integrity of Shane’s supply chain: “After hearingControversial evidence“As part of a wider inquiry from the company this week about employment rights in the workplace.

Byrne told the Financial Conduct Authority’s chief executive, Nikhil Rathe, and Dame Julia Hoggett, head of the London Stock Exchange, that the committee would “get clear answers from Sheen about his business practices”. He struggled,” he wrote.

A senior Shein employee declined to answer several questions about whether the cotton used in some of its products is from China’s Xinjiang region, asking both companies for more details and to check the labeling process. , also planning to pursue a list in London this year.

Founded in China and based in Singapore, Shin uses thousands of manufacturers in China to make its clothes and then sells them internationally at extremely low prices.

It has grown since the Covid-19 pandemic but has faced accusations of poor working practices in its supply chain. The company has repeatedly said it has a “zero-tolerance policy” on forced labor and understands that most of its cotton comes from Australia and the US.

Responding to Burn’s letter, the FCA said: “We look forward to explaining our role in our response to the committee.”

Rati He told the Financial Times last month that the FCA will decide whether to allow a company to list in London only on its disclosures, not “all of their corporate characteristics”.

Without commenting on Sheen specifically, Rathi said it was “not unusual” for UK-listed companies to bear legal risks around the world and “the important thing is that they disclose it, the investors understand it and they can price that risk”.

Before a company can list in the UK, the FCA checks that the prospectus contains all the elements it must, but does not guarantee the accuracy of this information.

Any errors or omissions discovered later may lead to investor prosecution and FCA enforcement action.

Rathi will join UK Chancellor Rachel Reeves on a three-day trip to China this weekend to discuss Shein’s detailed plans with their counterparts in Beijing.

David Schwimmer, chief executive of LSEG, which owns the London Stock Exchange, is part of the delegation.

Bern In his letter to Hoggett, he said he was deeply concerned about the lack of clear and concise answers to some very simple basic questions about the supply chain from Sheen.

LSEG asked if it could verify “statements made by firms seeking to list, particularly regarding safeguards against the use of forced labor in their production.”

Writing to Ratti, he wanted to know what checks are in place to ensure companies are disclosing legal risks to potential investors in their prospectus.

LSEG and Shein did not immediately respond to a request for comment.