Stop Uyghur Genocide, a UK-based human rights charity, has launched a legal campaign against the planned listing of Chinese fast-fashion retailer Shein on the London Stock Exchange.
The group, represented by law firm Leigh Day, claims that minority Uyghur people are being used as forced labour at some of Shein’s cotton suppliers in China’s north-western Xinjiang region.
The company, valued at $66bn in a fundraising round last year, began exploring a listing on the LSE early this year and is expected to file a prospectus with the UK regulator soon.
Conditions of employees of Shein
Workers put in up to 18 hours a day, every day with only one day off per month, according to an undercover investigation from Channel 4. In addition to receiving a base pay of 4,000 yuan (~$556) per month, workers are also expected to produce 500 garments daily and earn 2 cents per item in commission.
The monthly average salary is 29,300 yuan (~$4,534), or seven times the wage of a Shein employee. Also, if an employee messed up, they would have to pay a fee equal to two-thirds of their daily salary.
Amnesty International UK has called Shein’s potential London listing a “badge of shame” for the London market due to its questionable labor and human rights standards. The group argues that the London listing should not be allowed to go ahead because the UK has signed up to International Labour Organization conventions, which set out minimum standards for engaging workers.
Any concerns about companies engaging workers in their supply chains that may breach those minimum standards are inconsistent with the UK’s convention obligations.
Leigh Day solicitor Ricardo Gama, who represents Stop Uyghur Genocide, expects UK financial institutions to uphold high ethical standards and make clear that London is not the place to come for a ‘no questions asked’ approach to capital.
Stop Uyghur Genocide is concerned about the London Stock Exchange’s ability to detect and respond to any alleged forced labour in Shein’s supply chains.
Stop Uyghur Genocide is preparing a detailed submission to the regulator to support its letter.
In the meantime, the campaign group’s lawyers have asked the Financial Conduct Authority (FCA) to obtain more information from Shein about the accuracy of its published modern slavery statement.
Under the Modern Slavery Act, large businesses have to publish a statement every year that sets out the measures they have taken to ensure slavery and trafficking do not occur in their own operations and their supply chains.
Rahima Mahmut, executive director of Stop Uyghur Genocide, said she was “deeply concerned” about Shein’s potential London listing and that the investment community must not support companies like Shein who are reportedly linked to the Chinese state and which they believe may enable the ongoing genocidal policies against Uyghurs.
The FCA declined to comment on Shein’s potential listing and noted that it has no investigation or enforcement powers relating to alleged breaches of legislation not within its remit, such as the Modern Slavery Act or tax legislation. Before a company’s shares can be admitted to the LSE, the firm must apply to the FCA for admission to listing and to approve its prospectus.