Shein, the fast-fashion e-commerce platform founded in China, has disclosed that its U.S. business operations are under investigation by the U.S. Federal Trade Commission. The disclosure was made in documents published by Hong Kong's stock exchange in connection with the company's planned initial public offering.
According to an FTC spokesperson, the investigation is focused on potential violations of consumer protection laws. Despite this, the company has not disclosed when the probe began or further specifics regarding the investigation.
In its filing, Shein warned that the outcome of the investigation, whether through a settlement or otherwise, may require the company to make significant monetary payments. Such payments could have a material adverse effect on its financial condition and results of operations.
While the company intended for its Hong Kong listing to focus on growth, the draft prospectus revealed the ongoing regulatory probe.