Regulator opens triple probe into Prax Group’s oil audits
The audit watchdog has launched three separate investigations into the auditing of the collapsed UK energy challenger Prax Group. The Financial Reporting Council (FRC) opened probes into the financial oversight and audit of Prax’s parent company, State Oil, and will also examine Big Four KPMG’s audit of the fiscal years ended 28 February 2022 and [...]
The Financial Reporting Council (FRC) has initiated three separate investigations into the auditing practices of Prax Group, a collapsed UK energy challenger. The regulator's audit watchdog announced the probes on Friday, following a meeting of the conduct committee on July 21, 2026. The inquiries will examine the financial oversight and audits of Prax Group's parent company, State Oil, as well as the fiscal years ended February 28, 2022, and February 28, 2023, conducted by the Big Four firm KPMG.
KPMG resigned as the independent auditor for Prax Group ahead of the company's financial collapse. PKF Littlejohn subsequently took over the audit duties, including the review of the fiscal year ended February 29, 2024. The FRC's decision to open the investigations does not imply any findings of misconduct or breaches at this stage.
The regulator's executive counsel will lead the investigations. Prax Group, headquartered in London, operated one of Britain's largest oil refineries before filing for administration in June 2025 due to a severe liquidity squeeze and debt-fueled growth strategies that left the company critically short on cash. The government subsequently took control of the Lindsey Oil Refinery in North Lincolnshire and later sold its assets to Phillips 66 in April 2026.
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