FRC Opens Investigation Into Prax Group Oil Audits
Lindsey Oil Refinery in North Lincolnshire, formerly operated by Prax Group prior to its collapse into administration. Source: Chris Chambers / Getty Images
The Financial Reporting Council has launched three separate investigations into the auditing of Prax Group, the UK energy challenger that went into administration last year.
The accounting watchdog opened probes into the financial oversight and audit of Prax parent company State Oil. It will also examine audits conducted by Big Four firm KPMG for the fiscal years ended 28 February 2022 and 28 February 2023.
KPMG resigned as independent auditor to Prax Group in the period leading up to the energy business collapsing. Mid tier accounting firm PKF Littlejohn subsequently took over the audit account, and the watchdog will also inspect PKF audit work for the fiscal year ended 29 February 2024.
Decisions to open the formal inquiries were taken during a meeting of the FRC conduct committee on 21 July 2026. In a statement released on Friday, the watchdog noted that opening an investigation does not constitute or evidence any finding of misconduct or breach at this stage.
Inquiries will be handled by the executive counsel of the regulator.
Administration and Refinery Assets
Headquartered in London, Prax Group was the parent entity behind one of the largest oil refineries in Britain. The business entered administration in June 2025 after facing a severe liquidity squeeze, following a period where aggressive expansion strategies reliant on debt left its operating entities short on cash.
Following the collapse, the UK government stepped in to take control of the Lindsey Oil Refinery located in North Lincolnshire. That state intervention culminated in the sale of the refinery assets to Phillips 66 in April 2026.
Source: City A.M.