KPMG Under Investigation Over Audits of Prax’s State Oil

The UK’s Financial Reporting Council (FRC) has opened an investigation into KPMG’s audits and financing arrangements of State Oil Limited, part of the collapsed Prax Group.

The investigation covers State Oil’s accounts from 2021 to 2024 and will also examine its 2024 audit by PKF Littlejohn, which took over from KPMG that year. The FRC is investigating KPMG’s audit work as well as an unnamed individual accountant.

Prax Group, which operated the Lindsey oil refinery in the UK, entered insolvency in 2025, putting more than 400 jobs at risk. The collapse prompted scrutiny from the UK Government over the group’s finances and its ownership.

Separately, Prax founder Sanjeev Kumar Soosaipillai is facing legal action from administrators, who allege that employees were instructed to create fictitious invoices worth £334 million to support borrowing. Soosaipillai has denied the allegations and said he acted in good faith.

KPMG and PKF Littlejohn said they would fully cooperate with the FRC’s investigation.