A human rights nonprofit is ratcheting up its legal campaign to sink Shein’s anticipated public float on the London Stock Exchange by threatening Britain’s top financial regulator with a high court challenge.
Speaking through its lawyers at Leigh Day on Monday, Stop Uyghur Genocide said it was “buoyed” by recent parliamentary questioning of Yinan Zhu, the e-tail juggernaut’s general counsel for Europe, the Middle East and Africa, after she was accused by frustrated lawmakers of “being disrespectful,” “obfuscating wildly” and “bordering on contempt” with her apparent inability to answer “very, very simple questions” such as whether Shein uses cotton from China, more than 90 percent of which hails from the controversy-riddled Xinjiang Uyghur Autonomous Region.
Stop Uyghur Genocide, which claims it has a dossier’s worth of evidence that links Shein’s supply chains to Xinjiang cotton, rendering it a beneficiary of the “proceeds of crime,” has given the FCA a 14-day deadline to respond to a so-called pre-action protocol letter that flags the start of the judicial review process. The nonprofit says that any attempt to list Shein on the public market would be unlawful under the United Kingdom’s Modern Slavery Act and that the agency should take a page from the United States and throw obstacles in the path of its application. The FCA, which is legally disallowed from confirming would-be listings, has declined to comment.
Shein, in written testimony that was submitted to the House of Commons’s Business and Trade Committee following its grilling, says that it has zero tolerance for forced labor and is committed to human rights. But while the Chinese-founded firm requires contract manufacturers of merchandise destined for the United States to only source cotton from “approved” regions such as Australia, Brazil, India, the United States, and in limited cases, certain countries in the EMEA and Southeast Asia regions because of the constraints of the Uyghur Forced Labor Prevention Act, it doesn’t “prohibit” the use of Chinese cotton where its use doesn’t contravene local laws or regulations.
Liam Byrne, Member of Parliament for Birmingham Hodge Hill and Solihull North and chair of the Business and Trade Committee, said he was encouraged to hear that Shein’s prohibition on forced labor applied universally to its products, regardless of the market in which they are sold. But he also wrote back to the Singapore-headquartered company to ask if it applies the same restrictions to United Kingdom-shipped goods as it does to those headed for the United States.
Byrne was far less conciliatory at last month’s hearing. In comments that were excerpted by Leigh Day’s legal letter, he told Zhu that the committee had been “pretty horrified by the lack of evidence” that she had provided that day. “You have given us almost zero confidence in the integrity of your supply chains,” he added. “You cannot even tell us what your products are made from and you cannot tell us much about the conditions that workers have to work in.”
Stop Uyghur Genocide, on the other hand, hasn’t let up with its indignation—one that is now buttressed by additional financial support from the Good Law Project, a political nonprofit that seeks to hold the government accountable through legal means. If the FCA greenlights Shein’s IPO prospectus or admits the platform’s securities to the official list, Stop Uyghur Genocide’s judicial review claim would “allege a violation of the legal obligations in place to ensure the FCA meets its integrity objective.”
“The decision to challenge Shein’s stock exchange listing is a crucial step toward accountability,” said Rahima Mahmut, executive director of Stop Uyghur Genocide. “For the Uyghur people, who are subjected to forced labor as part of China’s oppressive regime, this sends a powerful message that profits cannot come at the cost of human dignity and freedom. Companies must not be allowed to thrive on exploitation and systematic abuse. This legal challenge is not just about Shein—it’s about standing up for justice and ensuring Uyghur voices are heard.”
Jolyon Maugham, chair of the Good Law Project, agreed. He said that while all regulators are facing “huge political pressure” from Keir Starmer’s Labour government, the FCA is being asked to swallow the appalling wastefulness of Shein’s practices, its opaque ownership structure, and what looks very much like its links to the exploitation of the Uyghur people.”
“The Labour government is doing this because in a world where it stubbornly refuses to contemplate joining the single market, prostituting global Britain’s good name is the only way to pay the bills,” Maugham said.
Eleanor Lyons, Britain’s Independent Anti-Slavery Commissioner, has similarly warned both the government and the FCA that allowing Shein to list on the London Stock Exchange could imply an endorsement of “poor labor practices and a “prioritization of business growth at the expense of human rights.” At a separate hearing after Shein’s session, Lyons said she didn’t think that the Missguided owner was being transparent about potential human rights abuses in its supply chains. She also said that Britain needs a new “invigorated approach” to address modern slavery as it begins to lag behind other countries.
Then there’s the FCA’s own duty of care, said Leigh Day solicitor Ricardo Garma. “Our client believes that the FCA has a duty to make sure that the London Stock Exchange isn’t used as a way to raise capital for companies which have a high risk of financial crime,” he said. “That includes where the company produces goods using forced labor.”
Citing FCA guidance that manufacturers of cannabis-based products should not be allowed to list in London because possession of marijuana is still an offense in the United Kingdom, Gama said that “it would be surprising,” not to mention unlawful, if the body decided to take a “less robust approach to allegations of forced labor.”
Publicly, Shein has kept schtum about its IPO ambitions. But it says it expects to thrive in a market where it has operated since 2017, and to which Oxford Economics research says it contributed 589 million pounds ($731 million) to the economy in 2023 alone.
“Shein is not able to comment on news reports regarding any possible listings,” Zhu wrote last month. “We regularly evaluate the capital markets to identify suitable opportunities for a listing of our shares. While we cannot confirm plans for a listing at this time, we are pleased to share with the committee our view that the United Kingdom is a priority market for the business, and we look forward to a period of sustained growth here.”
