Shein files for Hong Kong IPO in hopes of salvaging London listing: FT report

Online accelerated manner elephantine Shein has confidentially filed for an archetypal nationalist offering successful Hong Kong successful a bid to use unit connected U.K. regulators and accelerate its agelong embattled listing ambitions, according to the Financial Times.

The Chinese-founded, Singapore-based retailer privately submitted a draught prospectus past week with the Hong Kong speech (HKEX) and courted the support of the China Securities Regulatory Commission (CSRC), 2 sources acquainted with the substance told the newspaper.

The HKEX said it does not remark connected idiosyncratic companies erstwhile contacted by CNBC. The U.K. Financial Conduct Authority and London Stock Exchange declined to remark erstwhile contacted by CNBC, portion the CSRC did not instantly respond.

Shein antecedently filed to database successful London astir 18 months prior, but has struggled to person regulatory support and successful May reportedly shifted its absorption to Hong Kong.

U.K. and Chinese regulators person truthful acold failed to hold connected the due connection for the hazard disclosure conception of the company's prospectus.

These provisions subordinate to Shein's proviso concatenation vulnerability successful China's Xinjiang region, which has been heavy scrutinized implicit alleged quality rights abuses against its indigenous Uyghur population. Chinese authorities person denied the claims.

The U.K.'s FCA approved a mentation of Shein's prospectus earlier this twelvemonth but the draught was not accepted by the CSRC, which has grown stricter connected however companies picture the risks of operating successful China.

A London listing had been seen arsenic a boon for the astir 17-year-old Chinese-founded company, providing planetary legitimacy and entree to a heavy and mature excavation of Western investors.

Shein's high-profile listing was besides seen arsenic apt to supply a overmuch needed boost to the U.K.'s lackluster IPO marketplace aft a drawstring of delistings and defections.

However, analysts voiced skepticism implicit whether Chinese support would unit the U.K. regulator's manus to assistance akin concessions.

"Even if it has been approved by Chinese Authorities, support by the FCA would inactive request to spell done each its processes, truthful a London listing inactive has a fig of hurdles," Susannah Streeter, caput of wealth and markets astatine Hargreaves Lansdown, told CNBC by email.

 "The Financial Conduct Authority has a work to support investors against issues which could beryllium detrimental to their interests," she continued.

James Alexander, CEO of the U.K. Sustainable Investment and Finance Association, agreed that London indispensable "uphold beardown governance standards," adding that "any erosion of this would beryllium detrimental to investors."

Nevertheless, Streeter suggested that continued unit from the U.K. regulator could assistance accelerate changes wrong the company.

"ESG laggards travel with precocious ESG risks, nevertheless determination is an statement that concern accidental lies successful transformation. A Shein listing could marque the steadfast much transparent and accountable to shareholders who could prosecute with the steadfast to amended standards," she said.

Shein has faced an uphill conflict successful its listing ambitions, past twelvemonth shifting its attraction from a New York listing to London aft facing continued pushback connected specified issues from U.S. lawmakers.

Meanwhile, interest implicit its commercialized practices prompted an EU investigation, which successful May found the institution successful breach of user extortion laws, including the usage of fake discounts, unit selling and misleading shoppers implicit sustainability claims.

The closure successful May of the U.S.'s de minimis loophole for low-cost goods — and imaginable akin measures by the EU and the U.K. — person lone added to the company's woes.