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A company which is seeking to float on the London Stock Exchange. The Committee has been pretty horrified by the lack of evidence that you have provided today. You've given us almost zero confidence in the integrity of your supply chains. You can't even tell us what your products are made from, you can't tell us much about the conditions which workers have to work in, and the reluctance to answer basic questions has frankly bordered on contempt of the committee.

A company which is seeking to float on the London Stock Exchange. The Committee has been pretty horrified by the lack of evidence that you have provided today. You've given us almost zero confidence in the integrity of your supply chains. You can't even tell us what your products are made from, you can't tell us much about the conditions which workers have to work in, and the reluctance to answer basic questions has frankly bordered on contempt of the committee.

Well, that's the chair of Parliament's Business and Trade Committee, Liam Burne saying the fast fashion retailer Sheen isn't up to scratch, but the company could also be the London Stock Market's next star listing. So what comes first? Ethics are business? Hello, you're listening to Bloomberg UK Politics. I'm Stephen Carroll, Hell, I'm you and Potts, Welcome to the program. The city of London is still one of the world's two most important centers for financial services, but the Stock Exchange, which can trace its history back to sixteen ninety eight, is struggling. Companies in London trade had a much lower valuation to peers in New York and have done for years. As a result, the number of firms listing their shares on the LC has slumped. Last year, the UK ranked twentieth in the world, behind Malaysia, Luxembourg and Amman. What the market is crying out for is a giant share offering to remind the world that London Stock Exchange is still relevant. Well, as luck would have it, online fast fashion retailer she In, which filed its plans last year, qualifies in terms of size with a likely market value of fifty billion pounds, so on the face of it, a fantastic boost for the UK's ailing stock market. As we heard from the Business select Committee, some people are not at all happy with how the company operates. Yeah and ged MPs and campaign groups of a list of complaints about the company. Shean has faced allegations, among others, which denies of using cotton tied to forest labor in the Chinese region of seeing Jiang. As a company operating in the UK, Shean is required to comply with the Modern Slavery Act, which is intended to come back human trafficking, and under that law of the company has to publish a statement every year to prevent forced labor in its business and supply chain. But campaigners say the ACT standard isn't high enough. Let's listen to some of the exchange on that subject between Liam Burn and she ands EMEA General Council yinan Ju.

Well, that's the chair of Parliament's Business and Trade Committee, Liam Burne saying the fast fashion retailer Sheen isn't up to scratch, but the company could also be the London Stock Market's next star listing. So what comes first? Ethics are business? Hello, you're listening to Bloomberg UK Politics. I'm Stephen Carroll, Hell, I'm you and Potts, Welcome to the program. The city of London is still one of the world's two most important centers for financial services, but the Stock Exchange, which can trace its history back to sixteen ninety eight, is struggling. Companies in London trade had a much lower valuation to peers in New York and have done for years. As a result, the number of firms listing their shares on the LC has slumped. Last year, the UK ranked twentieth in the world, behind Malaysia, Luxembourg and Amman. What the market is crying out for is a giant share offering to remind the world that London Stock Exchange is still relevant. Well, as luck would have it, online fast fashion retailer she In, which filed its plans last year, qualifies in terms of size with a likely market value of fifty billion pounds, so on the face of it, a fantastic boost for the UK's ailing stock market. As we heard from the Business select Committee, some people are not at all happy with how the company operates. Yeah and ged MPs and campaign groups of a list of complaints about the company. Shean has faced allegations, among others, which denies of using cotton tied to forest labor in the Chinese region of seeing Jiang. As a company operating in the UK, Shean is required to comply with the Modern Slavery Act, which is intended to come back human trafficking, and under that law of the company has to publish a statement every year to prevent forced labor in its business and supply chain. But campaigners say the ACT standard isn't high enough. Let's listen to some of the exchange on that subject between Liam Burn and she ands EMEA General Council yinan Ju.

Could you just tell us what do you source cotton from China?

Could you just tell us what do you source cotton from China?

So SHE is a company originated and developed in China, leveraging the Chinese supply chain, and we have since grown into a global business with presence in over one hundred and fifty countries.

So SHE is a company originated and developed in China, leveraging the Chinese supply chain, and we have since grown into a global business with presence in over one hundred and fifty countries.

But do you source cotton from China today?

But do you source cotton from China today?

So our suppliers we do not obviously own any manufacturing facilities. We work with the white network of suppliers supply chain.

So our suppliers we do not obviously own any manufacturing facilities. We work with the white network of suppliers supply chain.

In the products that ship, there is cotton from China.

In the products that ship, there is cotton from China.

Like I mentioned, the suppliers we work with, they are based in China, in Turkey and Brazil, and obviously many of them are in China.

Like I mentioned, the suppliers we work with, they are based in China, in Turkey and Brazil, and obviously many of them are in China.

This isn't a truck question, that's not a complicated question. In the products that you ship, will there be cotton from China?

This isn't a truck question, that's not a complicated question. In the products that you ship, will there be cotton from China?

So the suppliers we work with, most of them, they are based.

So the suppliers we work with, most of them, they are based.

Actually yes or no question? Actually do you think that there is cotton from China in the products that you ship yes or no.

Actually yes or no question? Actually do you think that there is cotton from China in the products that you ship yes or no.

My understanding and also share with all due respect while this under standard today's discussions about international supply chain and upholding the labor rights and standards. I can only answer questions as far as my position and responsibility relates to right.

My understanding and also share with all due respect while this under standard today's discussions about international supply chain and upholding the labor rights and standards. I can only answer questions as far as my position and responsibility relates to right.

Okay, But the first question is is there cotton from China in the goods that you sell?

Okay, But the first question is is there cotton from China in the goods that you sell?

So you can hear Liam Barn's frustration building in that exchange. He went on to try to ask that question ten times before saying that she AND's representative was bordering on contempt of parliament.

So you can hear Liam Barn's frustration building in that exchange. He went on to try to ask that question ten times before saying that she AND's representative was bordering on contempt of parliament.

Or UK retail reporter Jennifer Crear. He was watching that hearing and she's with us now that Jennifer MP's getting pretty riled by Shean at the committee. Why are they so angry about this issue?

Or UK retail reporter Jennifer Crear. He was watching that hearing and she's with us now that Jennifer MP's getting pretty riled by Shean at the committee. Why are they so angry about this issue?

Yeah, I mean it was a pretty remarkable hearing. I mean, as you can hear, she couldn't answer a single question, essentially deflecting any questions that were heading her way. And I mean the key issue here is whether or not any of Shean's item of clothings are linked to force labor in Shinjiang, even to the point where you know Liam Byrne was asking Miss drew whether or not whether or not the company even feared that there was forced labor in Shinjang. To that, she replied, you know, the company wasn't there to discuss a geopolitical issue, and so the key question is essentially transparency and fears that there are indeed forced labor links to suppliers of Sheen clothing. And you know, Timu, by contrast, its legal counsel was.

Yeah, I mean it was a pretty remarkable hearing. I mean, as you can hear, she couldn't answer a single question, essentially deflecting any questions that were heading her way. And I mean the key issue here is whether or not any of Shean's item of clothings are linked to force labor in Shinjiang, even to the point where you know Liam Byrne was asking Miss drew whether or not whether or not the company even feared that there was forced labor in Shinjang. To that, she replied, you know, the company wasn't there to discuss a geopolitical issue, and so the key question is essentially transparency and fears that there are indeed forced labor links to suppliers of Sheen clothing. And you know, Timu, by contrast, its legal counsel was.

A company in this space as well, another fast fashion retailer.

A company in this space as well, another fast fashion retailer.

Exactly exactly it's rival to she And it said it in contrast that it does not permit sellers from the seen Joan region on Timu on the platform and that less than one percent of the products it sells and this platform contains cotton. So there was some assurance. But she And by contrast, couldn't comment on the issue.

Exactly exactly it's rival to she And it said it in contrast that it does not permit sellers from the seen Joan region on Timu on the platform and that less than one percent of the products it sells and this platform contains cotton. So there was some assurance. But she And by contrast, couldn't comment on the issue.

Because I mentioned that Shean does publish this statement in accordance with the UK laws and the Modern Slavery Act as well. But generally, what has she And said here and elsewhere about these particular concerns.

Because I mentioned that Shean does publish this statement in accordance with the UK laws and the Modern Slavery Act as well. But generally, what has she And said here and elsewhere about these particular concerns.

Yeah, so, as you mentioned, Shean does publish a modern slavery statement on its websites, and by law, it's under the modern Slavery Act its it has to do so every year, and it has said outside of that that it has a zero tolerance policy towards forced labor and that it does adhere to the laws in the markets that they operate. But the key question here is whether or not it is aware of any links to force leab machine Jangle, if it could even kind of trace the origins of its products, and to that we don't have a clear answer.

Yeah, so, as you mentioned, Shean does publish a modern slavery statement on its websites, and by law, it's under the modern Slavery Act its it has to do so every year, and it has said outside of that that it has a zero tolerance policy towards forced labor and that it does adhere to the laws in the markets that they operate. But the key question here is whether or not it is aware of any links to force leab machine Jangle, if it could even kind of trace the origins of its products, and to that we don't have a clear answer.

You mentioned Timu just a moment ago, of course, and a lot of other companies involved in these hearings as well. It does seem that Shean's coming under more scrutiny because it's coming to London for the IPO that share offer.

You mentioned Timu just a moment ago, of course, and a lot of other companies involved in these hearings as well. It does seem that Shean's coming under more scrutiny because it's coming to London for the IPO that share offer.

Yeah, exactly, and it would be a pretty sizable IPO for the London market. It would give the company a valuation of approximately fifty billion pounds, which would be London's biggest ever IPO. And given that the market has lost a chunk of its market value from companies shifting their primary listings to New York, this kind of IPO, this size is very much needed, particularly given in recent years that London has lost a lot of its market value from companies shifting their primary listings to New York.

Yeah, exactly, and it would be a pretty sizable IPO for the London market. It would give the company a valuation of approximately fifty billion pounds, which would be London's biggest ever IPO. And given that the market has lost a chunk of its market value from companies shifting their primary listings to New York, this kind of IPO, this size is very much needed, particularly given in recent years that London has lost a lot of its market value from companies shifting their primary listings to New York.

It's a challenge that the market has been facing because of course there's this draw of first of all, valuations being so much bigger in the US market. I mean, if we think about there was a whole debate over Pie, which was one of the successful listings on the UK market last year. I spoke to their CEO in recent months talking about that, and he says they don't regret the decision of not going to the US, but he understands why so many companies do because they go over to the US and they get these big selling shows from the brokers that are trying to attract them to list there of course as well, And this is a challenge that many stock markets are facing. But I suppose the question, if we're thinking about it from the London point of view, is can MPs or regulators do anything to try and stop this ibo if they're not happy with some of these issues that were raised in the committee hearing about she In.

It's a challenge that the market has been facing because of course there's this draw of first of all, valuations being so much bigger in the US market. I mean, if we think about there was a whole debate over Pie, which was one of the successful listings on the UK market last year. I spoke to their CEO in recent months talking about that, and he says they don't regret the decision of not going to the US, but he understands why so many companies do because they go over to the US and they get these big selling shows from the brokers that are trying to attract them to list there of course as well, And this is a challenge that many stock markets are facing. But I suppose the question, if we're thinking about it from the London point of view, is can MPs or regulators do anything to try and stop this ibo if they're not happy with some of these issues that were raised in the committee hearing about she In.

Yeah. I mean, so if you cast your mind back to the election, which seems like years ago, Labor had launched a charm offensive with Sheen, essentially giving it assurances that it would not seek to block the move, and if you think about Labor's promised to kind of revolutionize capital markets and to attract investments, it's pretty unlikely that they will, although according to Bloomberg reports citing people familiar, they've said that they would leave the matter up to the regulator, which does not carry out in depth investigations into the company's employment practices. So that's definitely a cause for concern.

Yeah. I mean, so if you cast your mind back to the election, which seems like years ago, Labor had launched a charm offensive with Sheen, essentially giving it assurances that it would not seek to block the move, and if you think about Labor's promised to kind of revolutionize capital markets and to attract investments, it's pretty unlikely that they will, although according to Bloomberg reports citing people familiar, they've said that they would leave the matter up to the regulator, which does not carry out in depth investigations into the company's employment practices. So that's definitely a cause for concern.

It's certainly welcome in the city that Shean is choosing to come to London, but should be noted that, of course they went to go to New York first, and the Americans said they had concerns over the company and they didn't want the company, which is ostensibly Chinese or certainly founded in China, coming to list in New York. So in a way, London is second best for the company. Why does this all say about the broader health of the market for listings in the UK.

It's certainly welcome in the city that Shean is choosing to come to London, but should be noted that, of course they went to go to New York first, and the Americans said they had concerns over the company and they didn't want the company, which is ostensibly Chinese or certainly founded in China, coming to list in New York. So in a way, London is second best for the company. Why does this all say about the broader health of the market for listings in the UK.

Yeah, I mean, well, London has been struggling in recent years, so if you look at in terms of fundraising volumes, its global ranking has fallen dramatically such that it's been overtaken by markets like Amman, which is one percent of the size of the UK market. So certainly a listing like this would be incredibly helpful for London.

Yeah, I mean, well, London has been struggling in recent years, so if you look at in terms of fundraising volumes, its global ranking has fallen dramatically such that it's been overtaken by markets like Amman, which is one percent of the size of the UK market. So certainly a listing like this would be incredibly helpful for London.

This is such an interesting dilemma because it really us in the center of how the worlds of business and politics are interacting on on things like this as well. And I think you've laid out very clearly how important this listing would be from a business point of view for the London markets as well. But what I wonder watching the hearings yesterday when you saw the sort of level of emotion and peace are really engaged on this issue, and they do seem to have very specific concerns that these sort of companies might have if they were to come and list in London.

This is such an interesting dilemma because it really us in the center of how the worlds of business and politics are interacting on on things like this as well. And I think you've laid out very clearly how important this listing would be from a business point of view for the London markets as well. But what I wonder watching the hearings yesterday when you saw the sort of level of emotion and peace are really engaged on this issue, and they do seem to have very specific concerns that these sort of companies might have if they were to come and list in London.

Yeah, essentially it sends out a message that you know, if your company is large enough, if you're able to attract this much attention, that essentially they'll give companies a free pass, and this would set a worrying precedent going forward.

Yeah, essentially it sends out a message that you know, if your company is large enough, if you're able to attract this much attention, that essentially they'll give companies a free pass, and this would set a worrying precedent going forward.

Okay, Jennifer Creery, our retail reporter, thanks very much for joining us with the details of that hearing as well. I mean you, And it's so interesting to think about this because we know the government has been so keen, first of all, to attract growth as a broader mission as well. But you know, we had all the courting of the business world by the Labor government going in or the Labor Party going into these elections to see them face up to another. Yes, another reality of you know, if you want a vibrance doock market, you have to be able to attract businesses from around the world. But not all of them. You know, are are sort of necessarily one hundred percent good quote unquote, and that there are concerns that they'll want to address. Well they shouldn't be just I suppose looking to try and bring anyone to the market.

Okay, Jennifer Creery, our retail reporter, thanks very much for joining us with the details of that hearing as well. I mean you, And it's so interesting to think about this because we know the government has been so keen, first of all, to attract growth as a broader mission as well. But you know, we had all the courting of the business world by the Labor government going in or the Labor Party going into these elections to see them face up to another. Yes, another reality of you know, if you want a vibrance doock market, you have to be able to attract businesses from around the world. But not all of them. You know, are are sort of necessarily one hundred percent good quote unquote, and that there are concerns that they'll want to address. Well they shouldn't be just I suppose looking to try and bring anyone to the market.

Yeah, it's fruscating how the mood music on China has changed from the days of David Cameron taking Jijingping to a pub and sharing a pint. It's not that many years ago when the UK was desperate to court China, we would say all sorts of things to get Chinese investment and Chinese business. And now the mood music, just as in America, has changed really really so far. And I think what's interesting from this is it shows that both sides of the of the ale to use the American term, are agreed, or many many MP's are agreed on the threat from China. And it's not just conservative hawks like Ian Duncan Smith who talking about security concerns with the Chinese, but also from the labour side, politicians lightly Burne, who are concerned from a liberal perspective. They're concerned about workers' rights. They're concerned about forced labor and about other human rights violations which are alleged from China. So it does seem there's some kind of consensus on this in Parliament. It isn't everybody, and certainly not everybody in the city feels this way either. So it is a difficult issue for the Stock Exchange to balance.

Yeah, it's fruscating how the mood music on China has changed from the days of David Cameron taking Jijingping to a pub and sharing a pint. It's not that many years ago when the UK was desperate to court China, we would say all sorts of things to get Chinese investment and Chinese business. And now the mood music, just as in America, has changed really really so far. And I think what's interesting from this is it shows that both sides of the of the ale to use the American term, are agreed, or many many MP's are agreed on the threat from China. And it's not just conservative hawks like Ian Duncan Smith who talking about security concerns with the Chinese, but also from the labour side, politicians lightly Burne, who are concerned from a liberal perspective. They're concerned about workers' rights. They're concerned about forced labor and about other human rights violations which are alleged from China. So it does seem there's some kind of consensus on this in Parliament. It isn't everybody, and certainly not everybody in the city feels this way either. So it is a difficult issue for the Stock Exchange to balance.

Yeah, indeed, and look, it's also worth reflecting on some of the bigger policy priorities that the Labor Party has if we think in terms of workers' rights. This is something that Liam Burne has talked about before about how he wants, you know, the workers' rights legislation to be beefed up so that it does encompass more of the factors that we consider, and we talk about the Modern Slavery Act as well, to ensure that companies that are operating here do guarantee this through their supply chain, that certain workers' rights are sustained as well. And this points to another dilemma that the UK faces now being outside of the European sphere when it comes to regulation, because a lot of the rules that have been said have emanated from Brussels in recent decades, and now that the UK doesn't have to follow those, what choices it's going to make and whether it's going to come under pressure to perhaps not apply as rigorous regulation here in an effort to attract listing businesses versus what it would have been obliged to do versus in when it was a member of the European Union. So this is yet yet another dilemma that we're going to hear plenty more of. But very vocal commentary from Liam Burn in that Parliamentary committee here yesterday, I think you and we're going to be hearing plenty more about this as we run up to that hoped for IPO from Shean.

Yeah, indeed, and look, it's also worth reflecting on some of the bigger policy priorities that the Labor Party has if we think in terms of workers' rights. This is something that Liam Burne has talked about before about how he wants, you know, the workers' rights legislation to be beefed up so that it does encompass more of the factors that we consider, and we talk about the Modern Slavery Act as well, to ensure that companies that are operating here do guarantee this through their supply chain, that certain workers' rights are sustained as well. And this points to another dilemma that the UK faces now being outside of the European sphere when it comes to regulation, because a lot of the rules that have been said have emanated from Brussels in recent decades, and now that the UK doesn't have to follow those, what choices it's going to make and whether it's going to come under pressure to perhaps not apply as rigorous regulation here in an effort to attract listing businesses versus what it would have been obliged to do versus in when it was a member of the European Union. So this is yet yet another dilemma that we're going to hear plenty more of. But very vocal commentary from Liam Burn in that Parliamentary committee here yesterday, I think you and we're going to be hearing plenty more about this as we run up to that hoped for IPO from Shean.

Yeah, in remind of the challenge facing London Stock Exchange. Interesting survey from Aberdeen PLCs is that UK adults allocate just eight percent of their wealth to shares from the UK, the lowest of any major economy, so a lot of money flowing out of the UK and this London Stock Exchange very keen to do something about it.

Yeah, in remind of the challenge facing London Stock Exchange. Interesting survey from Aberdeen PLCs is that UK adults allocate just eight percent of their wealth to shares from the UK, the lowest of any major economy, so a lot of money flowing out of the UK and this London Stock Exchange very keen to do something about it.

Well that's it from us for today. If you like the program, don't forget to subscribe, give it five stars so other people can find it on Apple Podcasts, Spotify or wherever you listen.

Well that's it from us for today. If you like the program, don't forget to subscribe, give it five stars so other people can find it on Apple Podcasts, Spotify or wherever you listen.

This episode was produced by James Walcock and our studio engineer was Sure Roster Machia.

This episode was produced by James Walcock and our studio engineer was Sure Roster Machia.

I'm New and Potts and I'm Stephen Carroll. We'll be back with more tomorrow. This is Bloomberg. Bloomberg UK Politics.

I'm New and Potts and I'm Stephen Carroll. We'll be back with more tomorrow. This is Bloomberg. Bloomberg UK Politics.

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