New Delhi

Republican Senator Marco Rubio has urged the US Securities and Exchange Commission (SEC) to intervene in the potential public listing of Shein, a popular E-commerce platform, unless the company provides additional disclosures regarding its business operations and the risks associated with operating in China.

Advertisment

In a letter addressed to SEC Chair Gary Gensler, Rubio expressed concerns about Shein's recent move to seek approval from Beijing for an initial public offering (IPO), suggesting it could impact the accuracy of the company's filings.

Rubio highlighted the new regulations enacted by China's securities watchdog in 2023, which empower the China Securities Regulatory Commission to scrutinise offshore listings, potentially hindering Shein's ability to portray itself as an independent global retailer.

Shein, known for its affordable fashion offerings, primarily relies on thousands of third-party suppliers based in China, particularly in the textile hub of Guangdong province, to manufacture its products.

Advertisment

As per a Reuters report, the company's ties to China have raised concerns among US lawmakers, including Rubio, regarding the transparency of its operations and compliance with American regulations.

Rubio, who also serves as the vice-chair of the Senate Intelligence Committee, has previously advocated for measures targeting Chinese-owned platforms like TikTok, citing national security concerns.

Rubio's opposition adds to the mounting political challenges facing Shein as it endeavours to go public. Last year, a bipartisan group of US lawmakers urged the SEC to postpone Shein's IPO until the company could verify that it does not engage in forced labour practices.

Advertisment

The allegations stem from reports suggesting that Shein's supply chain may be linked to regions like Xinjiang, where concerns over human rights violations have drawn international scrutiny.

While Shein has denied any involvement in forced labour, Rubio insists on greater transparency and accountability from the company.

In his letter to Gensler, Rubio called for specific disclosures from Shein, including an acknowledgment of its use of cotton from the Xinjiang Uyghur Autonomous Region.

This demand aligns with ongoing efforts to address concerns related to human rights abuses in Xinjiang and ensure that companies operating in the region uphold ethical standards.

Additionally, Rubio urged Shein to disclose its reliance on the de minimis entry trade exemption, which allows the company to ship small packages directly to consumers without paying tariffs.

Shein has refuted claims that its business success is contingent on this exemption, emphasising its commitment to compliance with trade regulations.

(With inputs from Reuters)