SUG challenges Shein’s LSE listing over forced labor ties

Stop Uyghur Genocide (SUG) has taken a significant step in its campaign against fast-fashion giant Shein by submitting evidence to the Financial Conduct Authority (FCA), urging it to block the company's potential listing on the London Stock Exchange (LSE). SUG, led by prominent Uyghur human rights advocate Rahima Mahmut, has presented a detailed dossier alleging that Shein's supply chains are tainted by forced labor in the Uyghur region, a violation of the UK’s Modern Slavery Act.

The dossier includes a letter sent to Shein’s group companies and senior managers, along with evidence linking the company’s supply chains to forced labor in the Xinjiang Uyghur Autonomous Region (XUAR). SUG argues that such connections would make Shein's profits questionable under the Proceeds of Crime Act, raising serious legal concerns.

The United States Securities and Exchange Commission had already rejected Shein's application for listing in the U.S. due to these labor practice concerns. Following this precedent, SUG has now turned its attention to the UK, emphasising the risks of allowing Shein to trade on the LSE. The evidence submitted includes references to a 2024 Court of Appeal judgment acknowledging widespread human rights abuses in the XUAR cotton industry, from which 85% of China’s cotton originates.

SUG also highlighted a 2022 Bloomberg News report, which found that Shein garments tested in a laboratory contained cotton sourced from the Uyghur region. This finding strengthens the argument that Shein’s supply chains are compromised by forced labor.

Rahima Mahmut, SUG’s Executive Director, emphasised the importance of preventing Shein’s IPO on the LSE, citing the involvement of the Chinese Communist Party in the systemic exploitation of the Uyghur people. Michael Polak, Barrister and Chair of Lawyers for Uyghur Rights, echoed this sentiment, stressing that allowing Shein’s listing would undermine consumer trust and violate the Proceeds of Crime Act.

Ricardo Gama, a solicitor from Leigh Day representing SUG, pointed out that UK capital markets should not facilitate the growth of businesses linked to modern slavery. He urged the FCA to refuse Shein’s prospectus if it has been submitted for approval.

This development marks a critical moment in the ongoing efforts to hold companies accountable for their supply chain practices, particularly those linked to human rights abuses. The outcome of this challenge could set a significant precedent for how global markets respond to allegations of modern slavery in corporate supply chains.

Photo: Xinjiang Re-education Camp Lop County