Winston Sanjeevkumar Soosaipillai, former owner of Prax group, is being sued following the collapse of his oil refinery business, which includes the Lindsey oil refinery in Lincolnshire and operations in the Shetland Islands. His wife, Arani Soosaipillai, was also involved in the business.
Prax group declared insolvency, owing £250 million in taxes. The Soosaipillais paid themselves a £3.7 million dividend the year before the collapse, despite significant losses. The collapse has disrupted fuel supplies and jeopardized hundreds of jobs.
Six former companies, including State Oil Ltd, are suing Soosaipillai for breach of fiduciary duty. His whereabouts are unknown, and attempts to contact him have been unsuccessful. The Official Receiver now controls the Lindsey oil refinery.
The government, surprised by the rapid collapse, is investigating the matter. The Energy Secretary, Ed Miliband, has expressed concerns. The Insolvency Service is handling aspects of the situation.
Specific allegations against Soosaipillai remain unclear, as claim documents are yet to be released. The lawsuit alleges that he failed to act in the best interests of his companies.
The former owner of a British oil refinery is being sued following the chaotic collapse of his business empire and amid fears he has fled the country.
Winston Sanjeevkumar Soosaipillai faces allegations that he breached his financial duties to the Prax group before it declared insolvency earlier this month.
If he loses, the tycoon could potentially be forced to pay damages or hand over assets such as the mansion he owns in Surrey.
Prax’s parent, State Oil Ltd – which owned the Lindsey oil refinery in Lincolnshire, a string of petrol stations and oil and gas operations near the Shetland islands – declared insolvency earlier this month and was forced to call in administrators.
The collapse of the business has disrupted fuel supplies, put hundreds of jobs at risk and left tax officials chasing large unpaid bills.
Ed Miliband, the Energy Secretary, has also complained that Prax’s rapid demise blindsided the Government, with an investigation now under way into the events that preceded it.
The Official Receiver has taken control of the Lindsey oil refinery, given the site’s important role in the nation’s fuel supply.
Amid the chaos, neither government officials nor administrators looking after what is left of Prax have been able to trace the whereabouts of Mr Soosaipillai or his wife, Arani Soosaipillai, who co-owned the business with him.
Mr Soosaipillai has been uncontactable since the business collapsed, with calls and emails going unanswered. Insiders at his former business believe he has left the country.
He and his wife founded Prax in 1999 after studying accountancy and have done well out of the business, which reportedly made them billionaires.
The couple own a £4.5m mansion in the gated St George’s Hill estate in Weybridge, which in the past has been home to Russian oligarchs and football star Gary Lineker.
In the year before Prax collapsed, the Soosaipillais paid themselves a £3.7m dividend despite Prax posting $30m (£22m) worth of losses. Prax is also understood to have owed about £250m in taxes to HM Revenue & Customs at the time it collapsed.
Mr Soosaipillai could soon face claims on his assets after six of his former companies, including State Oil Ltd, Prax Petroleum and Harvest Energy, took legal action against him in the High Court.
The claim, filed last Friday, is for “breach of fiduciary duty”, records show.
Before the collapse of the Prax group, Mr Soosaipillai was the sole director of five of the companies now bringing the lawsuit.
The only exception was State Oil Ltd, where he was one of three directors.
Under company law, directors have a fiduciary duty – a legal responsibility – to act in the best interests of their business and not for their own personal gain.
The specific allegations against Mr Soosaipillai are not yet clear because the claim documents have not yet been published.
Neither he or his wife could not be reached for comment.
Teneo, the City firm responsible for the administration of the Prax group, declined to comment on Wednesday.
A spokesman for the Government confirmed that the Insolvency Service, which has taken control of Prax Lindsey Oil Refinery Ltd only, is not a party to the legal action.
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