Exclusive-Shein executive chairman to pass the baton as IPO nears completion, sources say

By Helen Reid, Selena Li and Kane Wu

LONDON/HONG KONG, July 13 (Reuters) - Shein Executive Chairman Donald Tang will step down as his mission of taking the company public nears completion, three sources with direct knowledge of the matter said on Monday, after three years as the public face of the global fast-fashion retailer.

A Chinese American billionaire who began his career in banking, Tang has acted as the Western representative of secretive Shein founder and CEO Sky Xu, liaising with politicians, regulators, and investors around the world and representing the e-commerce group at conferences and other public events.

Xu will take on the role of chairman, according to one of the sources, and will lead the investor roadshow ahead of Shein's listing in Hong Kong. 

The company's hearing with the Hong Kong stock exchange is set to take place on Thursday.

Tang, 63, will continue to work closely with the management team, as a senior adviser, for the foreseeable future, said another source with knowledge of the company's thinking, adding that there is no fixed timetable for the transition.

In Shein's filing, which should be made public in the coming weeks, Tang will not be mentioned among the company's leadership, according to one of the sources. They all declined to be identified as the information is not public.

 Shein declined to comment and did not respond to questions about the chairman transition.

Tang, who is based in Los Angeles, was introduced to Xu by Neil Shen, founding and managing partner of HSG, formerly Sequoia Capital China, and chosen for the role because of his China-U.S. dealmaking experience as former CEO of Bear Stearns Asia and his connections in finance and politics, one of the sources said. 

Shen did not immediately respond to a request for comment. 

IPO ATTEMPTS IN NEW YORK AND LONDON

Tang's initial mission was a New York IPO, with a move to Washington, D.C., to lobby politicians. As criticism of Shein's use of the "de minimis" customs duty waiver increased, he sought to get ahead of the issue in July 2023 by coming out in support of removing the waiver.

He also sought to defend Shein's reputation when lawmakers alleged its supply chain in China had links to forced labour, a highly contentious issue for Beijing, which denies any abuses. Shein says it has a zero-tolerance policy on forced labour.

After the attempt at a New York listing failed and Shein pivoted to London, Tang became a frequent guest at five-star hotel The Peninsula next to Hyde Park, often bringing his dog, a teacup Australian Shepherd called Satchi.

But the London attempt also failed as the China Securities Regulatory Commission withheld its approval even after the IPO was given the green light by Britain's Financial Conduct Authority, forcing the company to shift to a Hong Kong listing.

PARIS SEX DOLL SCANDAL 

Tang aimed to leave a legacy of tighter internal checks to remove sellers of illegal products from the marketplace and better relationships with regulators, one of the sources said.

Last year he spearheaded an internal push to improve regulatory compliance after Shein was hit with hefty fines from French and Italian regulators.

But in November, French regulators found sex dolls resembling children being sold on Shein's marketplace, triggering a national scandal and French government crackdown just as Shein launched its first permanent store in the BHV department store in Paris.

Tang featured along with Satchi on a giant poster unfurled on the BHV building ahead of the opening, which was marred by protests.

After the sex doll findings Shein temporarily suspended its platform for third-party sellers in France, then reinstated it after successfully defending against an attempt by the French government to shut it down via a court order. 

(Reporting by Helen Reid, Selena Li and Kane Wu; Editing by David Goodman and Jamie Freed)