Fast fashion giant Shein’s plans to go public in London are facing a legal challenge from the Uyghur rights group Stop Uyghur Genocide. The group announced on Monday that it would seek a judicial review if the UK’s financial regulator, the Financial Conduct Authority (FCA), approves Shein’s initial public offering (IPO).
The group accuses Shein of sourcing cotton from suppliers linked to forced labour in China, particularly from the Xinjiang region, where the Uyghur minority is allegedly subjected to human rights abuses. This legal challenge could put additional pressure on the FCA, although experts say the group faces a tough legal battle.
The FCA, which oversees financial listings, declined to comment on Shein’s potential IPO. Shein, for its part, denied the allegations, stating it has a strict policy against forced labour in its global supply chain.
The retailer is hoping to launch its IPO in London in the first half of this year, contingent on receiving the necessary regulatory approvals. This comes after Reuters learned from sources close to the matter that Shein has already prepared for the listing.
In 2023, a similar legal challenge arose when environmental group ClientEarth filed for a judicial review after the FCA approved the flotation of Ithaca Energy, a UK-based oil producer. The High Court rejected ClientEarth’s case, ruling that it was unable to prove the FCA had failed to disclose material risks.
The U.S. government, along with human rights organizations, has raised concerns about the treatment of Uyghurs in Xinjiang. These include reports of forced labour in internment camps run by the Chinese government. China has denied all allegations of abuse.
Xinjiang is a major global cotton producer, supplying about 80% of China’s cotton and 20% of the world’s supply. This links Shein and many other apparel brands to the risk of unknowingly sourcing cotton tied to forced labour.
In a submission to UK lawmakers, Shein clarified that it does not use cotton from Xinjiang for products sold in the U.S. market, in compliance with the U.S. Uyghur Forced Labour Prevention Act (UFLPA). However, Shein did not confirm whether the same policy applies to its products sold in other markets like the UK.
The company added that it does not ban the use of Chinese cotton in other regions where such use complies with local laws and regulations.
Read more: