One of the fast fashion companies Shein has failed to disclose its ultimate ownership in the UK business sector resulting in a breach of company law. This breach might disrupt the firm’s plans of listing in the UK. As per UK companies law, every business entity is required to declare the ultimate human beneficial owner.
Technically, the Person with Significant Control (PSC) has to provide crucial information for listing their companies with the company’s house. However, the fashion giant submits Roadget Business PTE limited, a Singapore-based company as its PSC. This is against the law since the aforementioned firm is not an actual individual.
As per the Companies house in the UK, there should be at least one director appointed by the applicant. The director should be over 16 years old and should be a natural person, not a company acting as a corporate directors. Also, the company should have a registered office address in the UK.
The issue was spotlighted by the founder of tax policy associates – Dan Neidly. He spearheads the tax policy associates which was established by the premier league to improve UK tax and legal policy went on to say that any individual knowingly or recklessly making a false or misleading filing would be treated as a criminal offence. He further suggested the company’s house in the UK build a system that automatically rejects unlawful fillings.
Shein added ‘we are grateful that this has been brought to our attention. Unfortunately, the error is not identified in the company’s registration process. We are currently working to rectify this.’
The company was founded in China in 2008 by billionaire Chris Xu, having its headquarters in Singapore. It is well known for its fast-fashion cheap clothing like bike shorts, bikinis, and crop tops. The brand was also seen associated with celebrities like Katy Perry and Rita Ora.
Started initially from humble beginnings, Shein has reached relative obscurity and went on to dominate the fast fashion market. In March 2023 fundraising was valued at $66 billion. Despite facing allegations of labour abuse in 2022 the brand focuses on investing in improving standards at its supplier factories.
Shein UK is still in the early stages of exploring the London Market. There is a very low chance of the US Securities and exchange commission approving its initial public offering there in London. If it were to go ahead it would become London’s biggest-ever corporate listing and boost the country’s reputation as the international financial centre.
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