Shein seeks China's permission for US IPO

January 15, 2024 00:00:00

HONG KONG/NEW YORK, Jan 14 (Reuters): Shein is seeking Beijing's nod to go public in the US, two sources with knowledge of the matter said, highlighting the limits of the fashion company's efforts to present itself as global rather than a Chinese company.

The move could further complicate Shein's listing plans, which have run into political opposition in the United States. A bipartisan group of US lawmakers has called on the Securities and Exchange Commission to block Shein's initial public offering until it verifies it does not use forced labor.

Shein, which according to one of the sources was valued at $66 billion in a fundraising in May, filed its planned US IPO with the Chinese regulator in November, the two sources said. This is despite Shein having moved its headquarters from Nanjing to Singapore in 2022.

Shein, which sells cheap fashion in over 150 countries, also confidentially filed with the SEC for the IPO in November, Reuters has reported. In a sign of the likely fraught nature of the application process, the SEC has yet to respond to Shein's IPO filing, one of the sources said.

Shein did not reply to a request for comment on Friday, and neither did the China Securities Regulatory Commission (CSRC) nor the SEC.

The sources declined to be identified as they were not authorized to speak to media.

Shein's filing with CSRC for the US float makes it subject to Beijing's new listing rules for Chinese firms going public offshore, said the sources.

Before the new listing rules were adopted, ride-sharing giant Didi Global (92Sy.MU) ran afoul of Chinese authorities by pushing ahead with its $4.4 billion US IPO in 2021, while a review of its data practices was being conducted. It was delisted from the New York Stock Exchange and was fined $1.2 billion by China over data-security breaches.

Under the CSRC rules, a host of authorities such as the National Development and Reform Commission, which supervises foreign holdings in local firms, the cybersecurity regulator and others may get involved in approving offshore IPO applications.

That is likely to lead to more uncertainty, as some agencies have divergent priorities, such as national security or data protection, bankers have said.