The Prax Lindsey oil refinery collapsed after \u201cmaterial irregularities\u201d were discovered in a complex \u00a3783m loan facility that funded the wider group, it has emerged.<\/p>\n
The refinery on the Humber estuary in northern England \u2013 one of just five left in the UK, \u2013 was suddenly plunged into administration<\/a> in late June, prompting calls from furious government ministers for an investigation into Winston Soosaipillai, Prax Group\u2019s oil tycoon owner.<\/p>\n Amid uncertainty about the whereabouts of Soosaipillai, who goes by his middle names, Sanjeev Kumar, administrators sifting through the rubble of the refinery\u2019s parent company, State Oil<\/a>, published a progress report on Wednesday.<\/p>\n Among details disclosed by Teneo, which is serving as the administrator for State Oil and five other group companies, is a \u00a370m debt owed to HM Revenue and Customs by the group entity Prax Petroleum. Including sums owed by the refinery unit itself, which is being liquidated separately, taxpayers are thought to be owed up to \u00a3250m by the wider Prax Group.<\/p>\n Alongside a list of hundreds of creditors, ranging from the oil company Shell to the ride-hailing app Uber and the pest control firm Rentokil, Teneo also offered new insight into the circumstances leading to the collapse of an oil empire that has been described by insiders as a \u201chouse of cards\u201d<\/a>.<\/p>\n According to the Companies House filing, the failure hinged on unspecified \u201cirregularities\u201d relating to the \u00a3783m loan, arranged by HSBC in 2021 and secured against expected future income from the sale of oil products, such as petrol and jet fuel.<\/p>\n This facility provided cash for \u201ccritical\u201d payments as they came due, such as supplier invoices.<\/p>\n State Oil was the guarantor of this securitisation facility, provided by an Ireland-based entity called Prax Global Financial Services (PGFS), which stood outside the Prax Group. PGFS itself borrowed from other international lenders.<\/p>\n Teneo said the refinery, whose revenue generation was critical to the group, was already in a poor financial position in June 2025; the administrator blamed frequent maintenance shutdowns and poor refining margins since Prax bought the plant from the French oil company Total in 2021.<\/p>\n Winston Soosaipillai\u2019s whereabouts are uncertain. Photograph: Prax Group<\/p>\n The group was exploring ways to raise new funds when \u201cmaterial irregularities\u201d were discovered and reported to State Oil\u2019s board, it said.<\/p>\n Teneo did not offer further details, such as who had identified the irregularities or what they were.<\/p>\n Directors of the company, including Soosaipillai, decided that the \u00a3783m loan facility should \u201ccease\u201d with immediate effect. This meant that guarantees provided by State Oil to other parts of the group for debt financing were also called into question.<\/p>\n The filings show that there are more than \u00a31.5bn of inter-company loans outstanding between entities being administered by Teneo.<\/p>\n The cessation of the loan facility meant that the refinery could no longer repay its major supplier, the global commodities trading company Glencore.<\/p>\n In response, under the terms of its supply agreement with Prax, Glencore seized control of crude oil and refined products, which meant that sales to customers \u2013 such as at petrol stations and airports \u2013 could not take place without its approval.<\/p>\n This, Teneo said, contributed to the \u201caccelerated nature\u201d of the company\u2019s collapse, which blindsided government ministers, who said that just weeks earlier Soosaipillai has assured them of the company\u2019s health.<\/p>\n There was less than a week between the discovery of the irregularities and the appointment of administrators, the filings show.<\/p>\n skip past newsletter promotion<\/a><\/p>\n Sign up to Business Today<\/p>\n Get set for the working day \u2013 we’ll point you to all the business news and analysis you need every morning<\/p>\n Privacy Notice: <\/strong>Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy<\/a>. We use Google reCaptcha to protect our website and the Google Privacy Policy<\/a> and Terms of Service<\/a> apply.<\/p>\n after newsletter promotion<\/p>\n In its 112-page update, Teneo described as \u201cuncertain\u201d the amount that could be recovered for creditors and said it was not yet clear how much they would claim.<\/p>\n It said there were \u201ca number of outstanding matters that may significantly impact the final outcome for creditors\u201d. It added that, while Companies House records showed that some creditors had outstanding loans to Prax companies, those companies\u2019 own records indicated that no money was actually owed.<\/p>\n Shell is owed more than \u00a310m; HMRC is owed \u00a370m; and Deloitte, which led a 2023 turnaround plan called Project King, is owed more than \u00a3700,000.<\/p>\n As well as large corporate creditors, 171 employees of State Oil are owed a combined \u00a34.2m, according to the filings. Of those, 45 have been made redundant.<\/p>\n Teneo said it was trying to sell some of Prax Group\u2019s assets, which include a North Sea oilfield, three tankers and hundreds of petrol stations. It placed the value of State Oil\u2019s shareholdings in subsidiary companies at \u00a3112.2m.<\/p>\n The administrator has also filed a legal claim for breach of fiduciary duty against Soosaipillai and said it would file a report into the businessman\u2019s conduct, to be provided to the government\u2019s insolvency service.<\/p>\n Soosaipillai and his wife, Arani, who between them jointly owned the Prax Group, took \u00a311.5m out of the business in pay and dividends after buying the refinery from Total, the Guardian reported this year<\/a>.<\/p>\n The energy minister, Michael Shanks, has since urged the couple to \u201cdo the decent thing\u201d<\/a> by paying support workers who have lost their jobs within State Oil, which employed 171 people, and in the wider group, which employed more than 600. Soosaipillai has not previously returned requests for comment directed to a former press representative.<\/p>\n Government officials are understood to have had difficulty contacting Soosaipillai. Sources said he is believed to have left the country following the collapse of his oil empire. It was based in Weybridge, Surrey, and he and Arani built it up from a single petrol station over nearly three decades through rapid, debt-fuelled acquisitions<\/a>.<\/p>\n The Official Receiver, an independent government employee managing the liquidation of the refinery, said it could find a buyer for the refinery, which has ceased production.<\/p>\n","protected":false},"excerpt":{"rendered":"The Prax Lindsey oil refinery collapsed after \u201cmaterial irregularities\u201d were discovered in a complex \u00a3783m loan facility that…\n","protected":false},"author":2,"featured_media":359965,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[51,16,15],"class_list":{"0":"post-359964","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-business","9":"tag-uk","10":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115062272418443897","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/359964","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=359964"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/359964\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/359965"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=359964"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=359964"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=359964"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}