UK court freezes £150m of assets of collapsed Prax Lindsey oil refinery owner
A court has frozen £150m of assets belonging to the owner of the collapsed Prax Lindsey oil refinery, an oil tycoon whose whereabouts have been a mystery since the plant’s sudden financial implosion earlier this year,Administrators sifting through the wreckage of five companies in the Prax empire are suing Winston Soosaipillai, better known by his middle names Sanjeev Kumar, for breach of his duties as a director after the energy group’s failure,On Wednesday freshly published court filings revealed that a judge at the high court in July granted the companies’ request for a “freezing injunction” against Soosaipillai,The order prevents him from removing from England and Wales, or selling, assets up to the value of £150m,If he fails to comply, he can be imprisoned or fined or his assets can be seized.
A separate claim form, detailing the companies’ case against Soosaipillai, revealed that they are seeking damages “in connection with a securitisation facility to which each of the claimants is party”.Alleged “irregularities” relating to a £783m securitisation facility – a form of loan that funded the cash requirements of Prax companies – were at the heart of the group’s failure, according to a report filed at Companies House by administrators last month.The companies are seeking damages in relation to “misrepresentation”, for inducing them to breach contracts “and/or causing damage by unlawful means and/or deceit”.The form states that the scale of damages being claimed is yet to be assessed.The court papers emerged as the trade union Unite staged a protest outside parliament, claiming that the failure of Lindsey, in Lincolnshire, and closure of the Grangemouth refinery in Scotland were “acts of industrial vandalism” and blaming inaction from the government.
Lindsey is scheduled to close permanently after no buyer emerged for the business during the administration process.At the protest on Wednesday, Unite’s general secretary, Sharon Graham, called on the government to “save Lindsey”, saying Labour “has the power to save these jobs”.Prax Lindsey, in the Humber estuary in northern England, was one of just five refineries left in the UK when it was plunged into administration in late June.The failure of the business prompted calls from furious government ministers for an investigation into Soosapillai, but officials are understood to have struggled to make contact with him.One source close to the company has previously told the Guardian that Soosaipillai and his wife, Arani, who co-owns the business, left the UK for Dubai in the days after the plant slumped into insolvency.
Michael Shanks, an energy minister, has previously called on Soosaipillai to do the “decent thing” by paying to support hundreds of workers who have either already been made redundant or face the prospect of losing their jobs.The Soosaipillais have taken about £11.5m in pay and dividends out of the company since buying the refinery from the French oil company Total in 2021, a Guardian analysis suggests.But the high court has now put significant strictures on how Soosaipillai can spend his money.Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionUnder the freezing order issued in July, the documents show, Soosaipillai was also ordered to provide solicitors for the companies with information about all of his assets worth more than £50,000.
The order permits him to spend £2,500 a week towards living expenses and “reasonable” sums on legal advice.According to the order, Soosaipillai had the option of paying £150m into the court or agreeing to provide another form of security agreed by the companies, rather than submitting to the order.The Soosaipillais,who were based in Surrey, started out with a single petrol station and built an oil and gas empire over 25 years with annual revenues of £10bn.At the time of the group’s collapse, it included a North Sea oilfield, hundreds of petrol stations, and Lindsey, an oil refinery that was responsible for 10% of UK fuel production.But insiders have since described a house of cards stacked on increasingly unstable foundations due its owners’ insatiable thirst for debt-fuelled growth.
By the time of its demise, the Prax Lindsey oil refinery had just £203 left in the bank when the commodities trading group Glencore, which supplied it with crude, called in $53,6m in debt, separate court documents obtained by the Times show,Soosaipillai is being sued by State Oil, the refinery’s parent company, as well as by four other entities in the Prax group: Prax Treasuryd, Prax Petroleum, Harvest Energy and Harvest Energy Aviation,Documents filed at Companies House last month by Teneo, the administrator of the five companies, revealed further details about the complexity and precariousness of Prax’s financial position in the months before it fell apart,The filings show that there are more than £1.
5bn of inter-company loans outstanding between entities being administered by Teneo,
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