Following sanctions from the United States Treasury Department, Sri Lankan energy firm LAUGFS Gas PLC has suspended its Dubai-based subsidiary, SLOGAL Energy DMCC.
The company announced its decision, which relates to the subsidiary’s alleged involvement in trading Iranian LPG, in a corporate disclosure to the Colombo Stock Exchange.
Immediate Suspension
The Board of Directors at LAUGFS resolved to immediately suspend all SLOGAL’s commercial operations, and the subsidiary committed to ceasing any trade involving sanctioned entities.
This swift decision follows the U.S. Treasury’s placement of SLOGAL on its Specially Designated Nationals (SDN) list, a designation that was officially announced on October 9th.
Legal Challenge Mounted
LAUGFS has now initiated an independent legal and compliance review led by recognized U.S. sanctions counsel, with the primary objective of petitioning for SLOGAL’s delisting.
The company asserted that all past commercial transactions complied with international trade practices and were supported by documentation verifying legitimate supply sources.
Domestic Supply Unaffected
The parent company has assured stakeholders that this recent development will not impact its core local business, confirming domestic LPG sales and distribution remain fully operational.
SLOGAL primarily functioned as an international trading arm for re-export operations, meaning core services within Sri Lanka will continue without any significant interruption.
Alleged Links to Iranian Trade
According to an October 12 report by The Sunday Times, the U.S. Treasury designated SLOGAL for its role as a “key player” in trading Iranian LPG. The Treasury stated SLOGAL was used by other entities to help facilitate the sale, shipment, and export of millions of dollars’ worth of Iranian LPG. These shipments allegedly involved multiple international destinations, including the countries of Sri Lanka and Yemen, according to the U.S. press release. SLOGAL Energy was previously the second-largest contributor to group revenue, experiencing exponential growth in markets like Bangladesh and the Maldives.