Former Prax CEO Faces UK Lawsuit Over Financial Irregularities and Misrepresentation

Former owner Sanjeev Kumar Soosaipillai of the UK's Lindsey oil refinery is facing a lawsuit over potential "irregularities" in his business empire's financial affairs. The lawsuit, filed by administrators Teneo, accuses Soosaipillai of breaching his fiduciary duties and misrepresentation. The refinery's collapse was attributed to "material irregularities" in a £783 million securitization facility arranged by HSBC Holdings Plc.

The former owner of the UK’s Lindsey oil refinery, Sanjeev Kumar Soosaipillai, is facing a lawsuit over potential "irregularities" in the financial affairs of his now-failed business empire. The lawsuit, filed by administrators Teneo in a London High Court claim, accuses Soosaipillai of breaching his fiduciary duties and misrepresentation [1].

The suit outlines a claim for misrepresentation and material irregularities related to a £783 million ($1.06 billion) securitization facility arranged by HSBC Holdings Plc. This facility was reported to have been terminated by the board of Prax’s parent company, State Oil Limited, in June 2025 due to these irregularities. The discovery of these issues led to the immediate cessation of the facility, resulting in the collapse of the group and the subsequent insolvency of the refinery [1].

The administrators of State Oil and Prax Group have identified significant financial irregularities that contributed to the collapse of the group. The administrators have filed a claim against Soosaipillai for a breach of fiduciary duties, alleging that he failed to act in the best interests of the company and its shareholders [1]. The administrators have also noted that the company was unable to secure separate financing after the termination of the securitization facility, leading to its eventual collapse.

The Lindsey refinery, which supplied almost 10% of the UK’s fuel before its recent crisis, has been in the hands of the Insolvency Service since the end of June. Some other parts of the Prax group are also in administration, a type of UK insolvency process that seeks to rescue firms. Officials have so far been unable to find a buyer for Lindsey [1].

The administrators have disclosed that the refinery owed significant amounts to the UK tax authority, HM Revenue & Customs, which created increased creditor pressure and instability. Additionally, the refinery had stopped paying its major supplier, Glencore Plc, due to financial problems, further exacerbating the situation [2].

The collapse of the Prax Lindsey oil refinery has raised questions about the financial health of the company and the role of its founder, Soosaipillai. The administrators have noted that the company was already in a poor financial position in June 2025, with frequent maintenance shutdowns and poor refining margins contributing to its financial distress [2].

The administrators have not provided further details about the specific irregularities in the securitization facility, but the lawsuit filed against Soosaipillai suggests that there were significant issues that led to the termination of the facility and the eventual collapse of the company [1].

The collapse of the Prax Lindsey oil refinery has had significant implications for the UK’s energy sector. The refinery was one of just five left in the UK, and its closure has raised concerns about the country’s energy security. The administrators are currently exploring options for the sale of some of Prax Group’s assets, including a North Sea oilfield, three tankers, and hundreds of petrol stations [2].

The energy minister, Michael Shanks, has urged Soosaipillai and his wife, Arani, to "do the decent thing" by paying support workers who have lost their jobs within State Oil. The administrators have also filed a report into the businessman’s conduct, which will be provided to the government’s insolvency service [2].

References:
[1] https://www.bloomberg.com/news/articles/2025-08-21/former-owner-of-uk-refinery-sued-over-financial-irregularities
[2] https://www.theguardian.com/business/2025/aug/20/loan-irregularities-collapse-prax-lindsey-oil-refinery