Fast fashion giant Shein has confidentially filed for an initial public offering (IPO) in Hong Kong, the Financial Times reported on Tuesday.
The Chinese-founded, Singapore-based retailer privately filed a draft prospectus last week with Hong Kong’s exchange (HKEX) and sought the blessing of the China Securities Regulatory Commission, according to two people with knowledge of the matter.
The application is a means for Shein to increase pressure on UK regulators as it seeks approval for its London listing. The firm filed to list in the UK capital around 18 months ago, but has since struggled to obtain the green light.
Chinese and UK regulators have notably failed to agree on the language included in the risk disclosure section of its prospectus, particularly where this relates to human rights abuses.
Shein faces claims that it sources cotton from China's Xinjiang region, where the US and NGOs have accused the Chinese government of forced labour and human rights abuses targeting Uyghur people.The US banned imports from the area in 2021.
In January, Yinan Zhu, a senior lawyer representing Shein, refused to say whether the firm was using cotton from Xinjiang when questioned by UK lawmakers on the Business and Trade committee.
The UK’s Financial Conduct Authority approved a version of Shein’s prospectus earlier this year, but it wasn’t accepted by the China Securities Regulatory Commission.
Hong Kong’s exchange is expected to be more flexible than its UK counterpart when it comes to risk descriptions, although FT sources noted that London would still be the preferred listing location.
Shein had originally sought to list in New York, although changed its plans in response to significant political opposition in the US, linked to its labour practices as well as national security concerns.
Financially, Shein’s IPO would provide a boost to the London market that has seen a number of recent defections. Delisted firms include Just Eat Takeaway, Wise, Ashtead and Flutter Entertainment.
According to data from Dealogic, IPO fundraising in the UK market fell to at least a 30-year low in the first half of this year.
Euronews has reached out to Shein for further comment.
