Do we really want a Shein IPO?

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A human rights group is trying to block the fast-fashion house Shein from listing in London. It has concerns about the Chinese group’s alleged use of slave labour, though the specifics are not clear.

Shein says it has a “zero-tolerance policy for forced labour”, which is good to know. I think we’ll leave all this to the human rights lawyers — presently on the up — to sort out. And I think the Financial Conduct Authority should decline Shein on long-term financial grounds.

Shein might fetch a market value of £50 billion, supposedly, a tasty amount for a market that has been starved of floats for several years. But even if the allegations against Shein remain unproven, the sense that all is not well won’t go away.

Every time the City decides to chase a big float, two things happen. 1) It looks desperate. 2) The deal never happens anyway.

In 2019, the London Stock Exchange loosened regulations to allow the float of Saudi Aramco.

In the end, as seemed obvious, Aramco baulked at even the laxer rules and listed in Riyadh anyway.

In 2023, London politicians chased the float of microchip giant Arm. Despite lobbying from three prime ministers, Arm did what it was always going to do and chose New York.

A better approach is to play the long game. To say that the rules are there for a reason and shan’t be bent for anyone.

To say that London is a special members club that keeps the riff-raff out. If you can’t follow the regulations, you can’t join.

When the very rich man finds he can’t just buy his way into London, he is at first furious. Then it occurs to him that if even he can’t get around the watchdogs, no one can.

He is reassured by this, and the City remains Europe’s leading financial centre.

Bankers who say otherwise are looking for a fast cheque. That’s not the game we want to be in.

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