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 28 February 2023.
KPMG resigned as the independent auditor for Prax Group in the period leading up to the energy company’s financial collapse, and mid-tier firm PKF Littlejohn took over. This new probe will also examine PKF’s audit of the fiscal year ended 29 February 2024.
The decisions to open the investigations was made at a meeting of the FRC’s conduct committee on 21 July 2026. The watchdog noted in its press statement on Friday that opening an investigation does not constitute or evidence any finding of misconduct or breach at this stage.
The FRC’s executive counsel will conduct the investigations.
Energy group collapsed in 2025
London-headquartered Prax Group, the entity behind one of Britain’s largest oil refineries, went into administration in June 2025 after a severe liquidity squeeze and debt-fuelled growth strategies left key entities critically short on cash.
The group’s collapse led the government to take control of the Lindsey Oil Refinery in North Lincolnshire, which led to the sale of its assets to Phillips 66 in April 2026.