The Financial Reporting Council (FRC) has initiated three separate investigations into the auditing of the Prax Group, a UK energy company that collapsed. The probes will examine the financial oversight and audit of Prax's parent company, State Oil.
Big Four firm KPMG's audits for the fiscal years ending 28 February 2022 and 28 February 2023 are under scrutiny. KPMG resigned as Prax Group's independent auditor before the company's financial collapse, with PKF Littlejohn taking over. PKF's audit for the fiscal year ending 29 February 2024 will also be investigated.
The FRC's conduct committee decided to open these investigations on 21 July 2026. The watchdog stated that opening an investigation does not indicate any finding of misconduct or breach at this stage. The FRC's executive counsel will lead these investigations.
London-headquartered Prax Group, which operated one of Britain’s largest oil refineries, entered administration in June 2025 due to a severe liquidity squeeze and debt-fuelled growth strategies. The government took control of the Lindsey Oil Refinery in North Lincolnshire following the collapse, leading to its sale to Phillips 66 in April 2026.