Although a Shein spokesperson has stated that the brand has zero tolerance for forced labor. Still some US lawmakers have urged the SEC to crack down on Shein ahead of its possible U.S. IPO.
The e-commerce giant is accused of allegedly selling clothes made by forced labor in China.The top US market has been asked by bipartisan lawmakers ensure that fast-fashion giants disclose potential forced labor practices before company’s possible initial public offering in the United States.
The fast-fashion company has come under fire for accusations of mistreatment of Uyghurs by its supplier factories which are located in Xinjiang. This violates the 2021 Uyghur Forced Labor Prevention Act, stated two congress members in a letter to SEC Chairman Gary Gensler.
A representative of Shein denied the allegation and stated that all its suppliers must adhere to the code of conduct that is aligned to the core conventions of International Labour Organization. The representative reaffirmed that Shein has zero tolerance for forced labor.
The representatives are leading a bipartisan group, including 22 other lawmakers, in demanding the SEC require that Shein independently verify that it does not use forced labor before being allowed to issue securities in the U.S. The $64 billion company is preparing for a potential IPO later this year.
The letter questions Shein’s claims of third party audits to clarify its position.
They said audits could be manipulated.
They stated that many experts say it is logical to presuppose that any product made in the XUAR is made with forced labor.”
The de facto holding company of Shein in Singapore which hired its first lobbyist in the US in 2022 with the purpose of expanding its distribution in the US market. The retail giant currently relies on attracting young buyers through advertisements on mobile apps and through social media influencers.
The SEC has not yet responded to requests for comment.
