Shein’s London IPO: Could it be going out of fashion?
Najiyya Budaly from Law360 recently interviewed our CEO, Steven Friel.
Speculation surrounds the fast-fashion company, Shein and its recent quest to launch an IPO in London. Given the concerns looming around the Singapore-based company’s labour practices, questions have arisen regarding the redress available to investors to recover losses that might occur in the event of an ESG failure being disclosed.
Steven explains that companies must brace themselves for the aftermath of a breach of corporate governance standards being disclosed. He says, “We need to ensure that there is a hospitable environment for normal risk-taking, but we also need to ensure that there are consequences for catastrophic breakdowns in corporate governance at public equity companies that cause a significant decline in the share price.”
Steven draws comparisons on Shein’s labour practices with Boohoo, another UK- listed fast-fashion company facing allegations for its poor working conditions and supply chain failures. He explains, “[The Sunday Times] exposé raises serious questions about the veracity of the statements that had been previously made by Boohoo’s board and the information that had been published to the market.” He adds that there are “some parallels between Boohoo and Shein. We have knowledge of the supply chains that are involved in fast fashion. We’re using that knowledge to keep an eye on Shein.”
When discussing Woodsford’s role in aiding institutional investors to seek recourse from public companies over losses, which includes organising investors in an escalated engagement with Boohoo, Steven explains that the aim of escalation is, “to firstly, seek compensation but secondly, and very importantly, to hold the company to account.” He further adds, that if these companies continue to make misrepresentations, then investors aren’t looking to “attack it to make it less valuable. Their view is that they are making the company more valuable by forcing a serious reckoning.”
Steven encourages the need for investors to actively engage and exercise their ownership rights as that forces companies to “examine a catastrophic problem through litigation, where there’s a real light shone on the bad behavior, [and to] ultimately do better in the long-run after that cleansing process.”
You can read the full interview here.
For further updates regarding Woodsford’s collective redress, escalated engagement and investor stewardship activities, follow us on LinkedIn.
