Fashion company Shein is seeking Beijing's nod to go public in the U.S. to comply with new listing rules for local firms, two sources with knowledge of the matter said, a decision it has made despite efforts to push its global credentials.
The move could delay the fast-fashion giant's plans for its initial public offering (IPO) which is likely not only to face tougher-than-expected scrutiny from U.S. regulators in an election year, but also have to go through a lengthy approval process with numerous Chinese regulators.
Shein confidentially filed to go public in the United States in November and could launch its new share sale in 2024, in what is likely to be one of the most valuable China-founded companies to list in New York, Reuters has reported citing sources.
In the same month though, Shein also filed with the China Securities Regulatory Commission (CSRC) for the U.S. float, making it subject to Beijing's new listing rules for Chinese firms going public offshore, said the sources.
That move, which has not been reported before, puts into question Shein's efforts over the years to distance itself from China and position itself as a global company which included moving its headquarters to Singapore from Nanjing, capital of China's eastern Jiangsu province.
Shein did not immediately reply to a request for comment on Friday, and neither did the CSRC.
The new Chinese listing rules that came into effect in March last year stipulate that local firms wanting to list in offshore markets will need to make a filing with the CSRC and receive clearance from domestic regulators before proceeding.
One of the two sources cautioned that Beijing-Washington tensions in a U.S. election year would also likely thwart Shein's hopes of listing in New York in the near future.
The sources declined to be identified as they were not authorised to speak to media.
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 other industry regulators may get involved in approving offshore IPO applications.
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