The London Stock Exchange (LSE) is under pressure to closely vet Chinese fast fashion giant Shein ahead of its planned £50bn listing, amid fears about forced labour in its supply chain.
Liam Byrne, chairman of the business and trade select committee, has written to Julia Hoggett, the LSE chief, to raise concerns about Shein’s supply chain after a tense evidence session earlier this week.
Mr Byrne said MPs were left “profoundly concerned” after one of Shein’s lawyers refused to answer “basic” questions about where it sourced cotton from.
Yinan Zhu, Shein’s general counsel for Europe, Middle East and Africa, could not answer “some extremely simple, basic questions about the integrity of Shein’s supply chain”, Mr Byrne wrote.
Mr Byrne asked Ms Hoggett what checks are in place “to authenticate statements by firms seeking to list” on the LSE, amid growing concerns about the potential stock market debut.
In a separate letter sent to Nikhil Rathi, the chief executive of the Financial Conduct Authority (FCA), Mr Byrne raised concerns about the “lack of transparent answers” from Shein and asked how the City watchdog forces UK-listed companies to disclose any legal risks.
The pressure raises further doubts about the retailer’s hopes of blockbuster UK listing, in what has been touted as one of the biggest deals of the year.
However, concerns have been raised about Shein’s cotton supply and whether it comes from Xinjiang, where there is alleged forced labour of Uyghur Muslims.
In a heated session of the business and trade committee on Wednesday, MPs said they had “almost zero confidence in the integrity” of Shein’s supply chains and accused the company of “wilful ignorance” by refusing to say whether it sources cotton from China.
Mr Byrne said at the time: “For a company that sells £1bn [worth of products] to UK consumers and is seeking to float on the London Stock Exchange, the committee has been pretty horrified by the lack of evidence.
“You’ve given us almost zero confidence in the integrity of your supply chains. You can’t even tell us what your products are made from, you can’t tell us much about the conditions which workers have to work in, and the reluctance to answer basic questions has frankly bordered on contempt of the committee.”
Charlie Maynard, a Liberal Democrat MP, said: “Frankly, I don’t feel you’re respecting the committee at all.
“You say to our chair that you can’t state whether Shein is selling any products in China which are made of cotton. I find that completely ridiculous. I find it very unhelpful and disrespectful that you’re here doing this. It’s wilful ignorance.”
Story continues
Ms Zhu said she was answering their questions as best she could.
Yinan Zhu, general counsel at Shein, was accused of reluctance to answer basic questions at the business and trade select committee – House of Commons/UK Parliament/PA
It also emerged during the hearing that lawyers acting for Stop Uyghur Genocide (SUG) last week provided Ms Zhu with a dossier of evidence alleging abuses in the company’s supply chain.
When asked about the report, Ms Zhu said the company, which is known for its ultra-low prices, complies with the laws and regulations in the companies it operates in.
Eleanor Lyons, the UK Independent Anti-Slavery Commissioner, later told the committee that she had already raised concerns about Shein with the FCA.
She said: “I don’t think they’re being transparent about what is going on in their supply chains.”
The hearing marked MPs’ first opportunity to publicly grill the company as it prepares for its prospective flotation in London.