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Centri’s Christopher Mora Featured in 360Law: Shein’s Pursuit of London IPO Proves US-China Rift Persists

Centri’s Partner and Capital Markets Practice Leader, Christopher Mora, is featured in a Law360 article: Shein’s Pursuit of London IPO Proves US-China Rift Persists. The article discusses the Chinese online fashion retailer Shein and its decision to pursue an initial public offering (IPO) in London rather than the United States.

This decision comes amidst ongoing tensions between the US and China and regulatory challenges faced by Chinese companies seeking international capital markets. Shein had initially filed confidential plans with US regulators for an IPO, but after facing scrutiny over its labor practices and relationship with the Chinese government, the company began exploring a listing in London.

The company is now reportedly aiming to go public in London at a valuation of about £50 billion ($64 billion). This move could potentially impact the London Stock Exchange positively, as several notable British companies have recently gone public in the US. Shein’s decision could also influence other companies considering where to list their shares in the current geopolitical climate.

While Shein’s circumstances are distinct, capital markets advisers say China-area IPO candidates are likely monitoring the outcome of Shein’s go-public plans for lessons. Mora stated, “Any type of disclosure or regulatory enhancements that were being requested [of Shein] are going to be looked at. It will absolutely trickle down to other issuers from China.”

The article further discusses the concerns raised by US lawmakers about Shein’s business practices, particularly its sourcing of cotton, which has been linked to forced labor in the Xinjiang region of China. Despite these concerns, Shein has defended its business practices and stated that it has a “zero tolerance” policy for forced labor.

Viewing matters from the US side, the fallout from Shein’s episode doesn’t suggest the US will oppose future IPO prospects from the China region, which are likely to still regard American capital markets as the world’s gold standard.

Centri’s Capital Markets Expertise

If you are looking to go public, considering a capital markets transaction, or looking to enhance current SEC financial reporting and compliance processes, Centri is ready to support you with a team of cross-industry experts who will advise you and your business through every step of the process. We will help build an IPO or capital markets plan as well as help mitigate the accounting and financial risks that come with IPO preparation to ensure that your business has a seamless and successful public market entrance. Contact us to learn more about how Centri can help your company with its IPO preparation or recurring SEC financial reporting and compliance.